US: Durable Goods Orders likely increase 2.3% in June – Wells Fargo

The Durable Goods Orders June report will be released on Tuesday. Analysts at Well Fargo expect an increase of 2.3% in June, a forecast above the 2.1% of market consensus. They point out that if orders come in worse than expected, it could reflect caution among businesses, reflecting ongoing supply issues, bubbling price pressures and sagging demand.

Key quotes: 

“We suspect durable goods orders advanced 2.3% in June. The gain in orders should be led by a jump in aircraft, based on monthly orders data from Boeing. Excluding transportation, durable goods orders likely advanced a more modest 0.8% last month.”

“We'll be paying close attention to core capital goods orders, which exclude defense spending and aircraft orders. This measure reflects underlying business demand, and the trend has been impressive in recent months. We expect it to again indicate solid investment as businesses try to capture soaring demand, and it will be the final indication of Q2 capital investment before the official data for the quarter are released on Thursday.”

“A better-than-expected outturn, however, would indicate that despite recent bottlenecks, demand remains solid heading into the third quarter.”