US Durable Goods: Weakness reaches beyond just aircraft - Wells Fargo


Data released today showed that durable goods dropped 2.1% in April. Analysts at Wells Fargo, point out that while a 25.1% plunge in civilian aircraft orders weighed on the headline, the underlying details were not terribly encouraging. 

Key Quotes: 

“It is a matter of speculation as to when Boeing will have a fix in place for the 737 MAX and when shipments pick back up again. Most aerospace analysts expect this to be a matter of months, at which point we would expect to see headline durable goods orders boosted by aircraft for a few months.”

“Other key areas are also reflecting some of the slowing indicated by the April drop in the ISM index and in some of the regional Fed surveys. Notably, primary and fabricated metals have both experienced declines in two out of the past three months.”

“In addition to the pronounced volatility in global financial markets, the tariffs have been identified in the ISM report and in corporate earnings announcements as a factor negatively impacting profitability as well as creating supply chain headaches. Whether businesses are taking on additional inventory in anticipation of higher future costs or because they are concerned about product availability is unclear, but an inventory build is clearly under way. The inventory-to-shipments ratio rose to 1.67—the highest since July 2017.”
 

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.

Feed news

Latest Forex News

Editors’ Picks

GBP/USD surges toward 1.3150 amid upbeat UK data, USD weakness

GBP/USD has been extending its gains after the British CBI Trends figure beat expectations. Markets are pricing a BOE rate cut less aggressively. The US dollar is on the back foot across the board amid reduced coronavirus fears.

GBP/USD News

EUR/USD struggles to recover amid Trump's tariff threats

EUR/USD is trading below 1.11, close to the three-week lows, as President Trump continues threatening the EU with car tariffs. Markets remain concerned about the spreading coronavirus disease. 

EUR/USD News

Australian employment Preview: Upbeat numbers could temper rate cut expectations

Australia will release this Thursday its  December employment data. The economy is expected to have added 15.0K new jobs in the month, following a 39.9K increase in November. 

Read more

Gold Price Analysis: Intraday uptick falters near 50-hour SMA, remains vulnerable

Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European session on Wednesday.

Gold News

USD/JPY rises above 110.00, potential head-and-shoulders on 1H

Risk reset in stocks is boding well for USD/JPY.  The pair may be forming a head-and-shoulders pattern on the hourly chart. The bulls are not out of the woods yet and a break above 110.12 is needed to invalidate lower highs setup on the hourly chart.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures