February Durable Goods Orders just reported a 5.7% increase
for the month, higher than the 4.6% expected and a big swing from
the January adjusted number of -3.8%. Volatility would seem to
describe this number. Why?
Airplane sales. We were -24% in non-defense aircraft in
January, and the February number came in +95%! Non-defense,
ex-aircraft, the durable goods number in February was -2.7%, a
percentage point and a half worse than expected. Then again,
we're probably better off with new airplanes once in awhile,
Business investment does seem to be improving overall,
however, offering another feather in the cap of market bulls.
Whether that's already baked in the cake is less certain, but we
don't expect a major sell-off with this better-than-expected
durable goods number.
Later today, we expect plenty of other macro grist for the
mill: January's Case-Shiller Home Price Index (the gold standard
for home pricing, albeit far less than a leading indicator),
February New Home Sales and the Conference Board's March Consumer
Confidence. With a quiet day in company earnings reports (Q1
earnings season doesn't pick up til 2 weeks from now), these will
be the indicators for whether the markets will keep the gains in
the futures markets or give them back, like they did
The Cyprus bailout early Monday gave a boost to the markets
early, but the Dutch Finance Minister indicating that we may see
a Cyprus-style bailout elsewhere in the Eurozone led to a mild
sell-off by the end of the trading day. This helped the S&P
500 shy away from all-time highs, though the pullback was not
severe, and the S&P might be expected to continue this dance
for the rest of the week.
We're also in a shortened trading week, and it's also spring
break in many sections of the country. Not that bikini-clad
college kids in Daytona Beach have much to do with the investment
culture (they're going to need a few years), but the point is, we
expect relatively low volume overall this week, barring any major
Today's economic releases include
which is expected to decrease to 66.9 and
New Home Sales
, both of which are scheduled for release at 10:00 AM EST.
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