Big news this morning is the Durable Goods New Order report, which printed -3.6%, missing the estimate of -2.5% and fully 8% lower than the previous month. Now that is a big swing! Say hello to new 2nd quarter GDP estimates coming soon, likely below 2%.
What was reported in the 3rd paragraph was the Inventory print. After being up 16 straight months, reaching a new level of $350 Billion, which is the highest ever since the series was first established in 1992. Lets see if I understand this..... New Orders for Durable Goods have plunged, now in negative territory, while Inventories of Manufactured Goods have increased to historic levels. Does anyone remember what an Inventory Recession looks like? Remember, at some point a whole bunch of cars, washing machines and Ipad wanna be's have to be sold....and that may take more time than expected. That is why inventories have been built up. As manufacturers cut back production, our economy begins to lose steam. Again. Then it will drive a whole new set of quarterly earning reports, and a revision of Price/Earnings ratios. Duh!
This morning Mr Market open down about 35 Dow points, after being off 100 points overnight. Currently, the Dow is up 10 points, the SPX up 1.58 and the rest of the major indexes are also higher about 1/2%. Oil is off a few ticks at 99.18 and Brent is higher a few ticks at 113.50. Gold is trading up at 1526.10 and Silver is higher, trading at 37.31. (Momentum Change indicators are very close to flipping to a buy, however, there is likely resistance at 28). The rest of the commodity complex is higher across the board, with not a single Red arrow to ruin all the Green.
The Euro is off a couple of ticks at 1.407, while the Dollar has resumed it march higher, trading 75.94 after trading as high as 76.32 earlier. Bond are off a little this morning, with the Note trading 3.119% and the Bond trading 4.26%. The Note had gotten to 3.08% before weakening. I think we will see sub-3% shortly.
Only change likely today is in Silver. However, we do not have a recommended trade in that ETF.
Best To Your Trading!
Bill
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