April Durable Goods Bounce On Defense Orders; Machinery Goods Drop Most Since February 2013; CapEx Slides 1.2%

Another month, another indication that the spike in "harsh unweathering" took place in the last month of Q1 and momentum slowed down entering the balmy Q2.

Moments ago the Commerce Department released Durable Goods data which came in far stronger than expected, printing at a 0.8% sequential bounce on expectations of a -0.7% drop. However, indicating that there was more than meets the headline was the barely unchanged print in Durable goods Ex Transports, which rose just barely, printing at 0.1%, in line with the 0.0% expected. In other words, the headline spike was entirely due to volatile components and sure enough to the Commerce Dept, the Defense capital orders (perhaps because the world is preparing for war?) soared by 13.1%, the most since December 2012. Helping this was the 70 new airplane orders reported by Boeing, higher than expected but still lower than the 163 bumper orderbook from March. And now the bad news: Machinery orders, that real indicator of core economic activity, bumped by 2.9% - this was the biggest slide since February 2013.

Finally, those looking for a stable core capex rebound will have to wait one more month: after a hefty upward revision to March data, which rose by 2.1% compared to the 1.0% reported previously, April saw a 1.2% drop, well below the -0.3% expected. Then again, less capex is great news for shareholders - it simply means more cash is available for stock buybacks, which as everyone knows is the most bullish available capital allocation option available to CEOs.

The breakdown:

Durable Goods:


Durable Goods ex Transports:


Capital Goods Orders nondefense ex Aircraft:


And Machinery orders monthly change:


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