January Durable Goods fell a greater than expected 5.2% (consensus was -2.5%) but ex transports, the drop of 2.5% wasn’t that much worse than estimates.

However, the December data was revised down sharply. Non Defense Capital Goods ex Aircraft fell a sharp 5.4% after a 5.8% drop in Dec. The declines were widespread and further evidence of companies continuing to batten down the hatchets. Shipments, which gets directly plugged into GDP, fell 3.7% and is down for 4 straight months.

The inventory to shipments ratio rose to the highest level since 1992. Initial claims totaled 667k, much higher than the consensus of 625k and Continuing Claims were 87k more than expected and at a new all time high (but not adjusted for population growth) and does not bode well for next week’s employment data.

Bottom line, there is absolutely nothing within today’s data to hang one’s hat on as the deterioration continues and the dark tunnel sees no end.

– Peter Boockvaar

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “Durable Goods Data”

  1. leftback says:

    No arguments here about the weakness of the economy, but…. It seems to me that the second differential is getting close to zero, and that combined with the large gap between here and the 200DMA suggests to me a high probability of a significant rally in the coming weeks.

    Have been short gold and long oil this week for a nice gain. Looking at GDX $30 as a re-entry point for now.

  2. Chief Tomahawk says:

    In the tradition of “Animal House”, what a great time for a market rally!!!!!

    BUY, BUY, BUY European banks……….

  3. doug says:

    Or is it ‘bye, bye,……’

  4. MexicaliBlues says:

    Almost time for this mini rally/bounce to fizzle out if you ask me, though I do think a significant counter trend multi month rally is setting up around the corner. Hope to sell that hard later this year! The bear will reign for a couple more yrs.

  5. trainreq says:

    While I suspect that you meant to say “batten down the hatches”, I fear that what you wrote is perhaps more apropos.

  6. rob says:

    @trainreq: LOL… good one. Maybe he’s hinting that March of the Machetes is close at hand!

  7. Transor Z says:

    Argh! Shiver me tempers and host the missing mast! A vast yeast curvy dogs! Argh!

  8. call me ahab says:

    it’s all bad- along with a 1.75 trillion deficit- no resolution for the banks outside of continued infusions of government cash- GM is a complete disaster- whare is some good news?

  9. Stuart says:

    But, but….the banks… they’re getting saved…. rally on. Doesn’t matter how much we borrow or print,… just at all costs, save the banks. Today’s mantra for Wall St. I guess.

  10. Andy Tabbo says:

    Gold….” ’tis but a fleshwound….”

    I actually see some support for April gold 932 – 937 so may not be a bad time to lighten up on some shorts ….

  11. Ventura2012 says:

    If my calculations are correct any new injections into Goldman would be at 71, which is the average of the 20 days prior to Feb 9th with a 10% haircut. They seem to be one of the few financials that would not benefit from more injections as their price has run up since January unlike the commercial and money center banks.

  12. AT,

    your previous call on Yen (Short) was sweet, too..

    as an aside, as Au y Ag was hitting 1000 and ~14 1/2, my friend, the coin dealer, was busier than she was @ ~700 and ~9..

    peeps luv to buy’em High..

  13. Andy Tabbo says:

    Yen has been real disaster. If you think our economic data looks bad, then make yourself feel better and check out Japanese data….a real horror show.

    Yen probably getting a little oversold now, but with the break of 105.50 we got a confirmation of a major double top, so any rallies in the yen will be rallies you want to sell.

    For anyone into classic “patterns,” there’s a nice example of a potential inverse head and shoulders bottom on the SP500 intraday charts. I see the neckline around 780 which makes the 780 level very important. Now, on a level that important, one wants to see a SOLID sharp break. And the market should not be able to trade back below 780 if it gets snapped…

    Hoffer FYI: See you have a blog. Check your email from the blog.

  14. Jdamon33 says:

    For those traders on the board (excludes 90% who are permabears), anyone think going long XLF is a good move or would you just stick to the quality banks (WFC, USB, etc.)?

    Also, I have a good amount of Gold, should I bail?

    Finally, I have a chinese short (FXP) which hasn’t done very well for me recently. It’s almost looking like most of Asia has bottomed for now. time to get out or stay the course?

    AT, Leftback, Karen, Mannwich, feel free to chime in and TIA! Your comments are invaluable.

  15. 10 cc says:

    Ah, but the Double Inverse Taxpayer ETF doesn’t seem to care. XLF up 5.0%.

  16. MRegan says:

    Jdamon33

    2 ideas-high risk

    xl and acas

    XL seems like it has established a good base between 3.20 and 3.60, will trade in sympathy to news about AIG- that is AIG will likely suffer a transformation which will benefit XL.

    ACAS- higher risk this seems like a do or die so a stop-loss @ your risk tolerance under purchase.

    WFC moved too fast, last good price was offered on tues.

    Also- is PBR set to move? Was 25 tested as a hard floor? Speculative- Soros could pull the rug out but it won’t matter if oil responds to supply pressures.