According to analysts from Wells Fargo, the US February durable goods orders report showed a modest improvement in capex spending. They expect an improvement in business spending.
Key Quotes:
“For the second month in a row, durable goods orders came in stronger than expected, but disappointed in the details. Orders for long-lasting goods rose 1.7 percent in February (versus expectations for a 1.4 percent rise). In addition, orders in January were revised up and are now reported to have increased 2.3 percent (versus 2.0 percent previously).”
“Elsewhere, however, orders were less impressive. Orders for defense goods, which are also volatile from month to month, fell 8.3 percent amid falling aircraft orders. Potential cracks in the auto sector, which has been a bright spot in recent years, are beginning to emerge. Orders for vehicles & parts fell 0.8 percent and are nearly flat over the past year. The pullback in orders (and shipments over the past two months) is consistent with the softer sales environment since early this year. After falling the past three months, inventories, at least at the manufacturing stage, remain contained and should limit the near-term hit to production for motor vehicles & parts.
“Our preferred barometer of near-term business spending, nondefense capital goods orders ex-aircraft, posted the biggest miss in February. Orders for this component slipped 0.1 percent compared to expectations for a 0.5 percent gain. Still, core orders indicate stronger momentum for capital expenditures in the coming months, having risen at a 9.1 percent average annualized pace over the past three months—the fastest clip in two and a half years.”
“The strengthening in core orders of late still looks a bit weak when compared to softer data like the purchasing managers indices. Business optimism has been at cycle highs since the start of the year, but has yet to translate into commensurate strength in real activity. Nevertheless, we still look for business spending to improve in the coming months given the general strength of the survey data as well as the improvement in growth overseas and improving corporate profits.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory near 1.0650
EUR/USD clings to modest daily gains at around 1.0650 in the American session on Wednesday. The US Dollar struggles to gather strength amid a modest improvement seen in risk mood and helps the pair hold its ground.
GBP/USD stabilizes at around 1.2450 after UK inflation data
GBP/USD consolidates its daily gains near 1.2450 after recovering toward 1.2500 with the immediate reaction to stronger-than-expected inflation data from the UK. The renewed US Dollar weakness also helps the pair hold its ground.
Gold eases despite risk-off mood
Gold trades in a relatively tight range near $2,390 in the second half of the day on Wednesday. In the absence of high-tier data releases, investors keep a close eye on headlines surrounding the Iran-Israel conflict.
XRP tests $0.50 resistance after Ripple CLO clarifies that no pretrial conference took place with SEC
XRP is stuck below $0.50 resistance after failing to close above this level since Monday. Ripple CLO Stuart Alderoty said late Tuesday there was no pretrial conference since the SEC dropped charges against executives.
World economy: To cut or not to cut (simultaneously)?
US inflation March figure, again higher than expected, put an end to the scenario of a simultaneous first rate cut by the Fed, the ECB, and the BoE in June.