Wednesday, July 28, 2010

Durable Goods Orders decline unexpectedly

The other shoe dropped this morning as Durable Goods Orders for June came in at -1.0% compared to May's data of -0.6%. Expectations were for a positive +1.0%. They revised May's data downward, as well, to -0.8% from -0.6% and that isn't good either. If you look at Durable Goods Orders less Transportation, the data came in at -0.6% compared to May's data of +1.2%. This is not good news for the economy nor for the stock market.

So couple yesterday's Conference Board's Sentiment Index data which was also disappointing at 50.4 versus an expected 51.0 and a previous month data revised of 54.3, and you have 2 sets of poor numbers if you wanted to see a strengthening economy, to help solve the Unemployment problem. Things are pointing in the wrong direction. Instead of getting better we are getting worse. There is no other way to be realistic about these numbers.

I will be out this morning and will not see the market's reaction until I return, but Futures are dropping in pre-market, the Dow Futures are down 30. They should be down a lot more in my view on this data. European markets are still positive after the reporting our news on Durable Goods Orders. Be looking for the positive spin they try to put on this on CNBC. But you believe the spin at your own peril. I notice that CNBC is sprinkling in good earnings reports to lessen the focus on Durable Goods data.

Be sure to leave a comment below, if you want to add anything to the conversation or the spin.

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