Pre-market futures are up at this hour Wednesday morning, with major U.S. indexes in the green along with oil and precious metals. We also begin to catch up on government-based economic reports, which had been delayed over a 5-week shutdown for most of January and part of December last year.
Durable Goods Orders for the month of January surprised to the upside in its release this morning: +0.4% on the headline not only outperformed estimates but swung to a solid positive number from negative expectations (-0.1% to -0.6%, depending on who you're listening to). December's Durable Goods headline ticked up 10 basis points to +1.3% in the revision. Good numbers here.
Stripping out volatile Transportation costs, we do swing back to a negative number: -0.1%. Yet Non-Defense Capital Goods, ex-Aircraft, reached +0.8% and ex-Defense +0.7% - definitely healthy reads, where Pentagon spending looked to be what held January's figures back. Because these can vary widely month to month, the "core" growth in Durables spending appear to be in a good place… or at least they were two months ago.
The February Producer Price Index (PPI) follows yesterday's in-line Consumer Price Index (CPI), coming in at +0.1%. This is lower than the +0.2% expected, but a neat swing to the positive from the previous month's -0.1%. Year over year, final demand reached +1.9%, basically level with expectations. Ex-food & energy (also potentially volatile measures) brought +2.5%, which was lower than estimated and below the previous month's +2.6%.
The takeaway here pivots on PPI vs. CPI reads: currently (or last month, at least) Consumer pricing is right where analysts had expected while Producers were trimming their price tags. For those of us who follow these reads, we are in "business as usual" territory, with a slow gradual increase over time on the Consumer side pretty much considered optimum.
Boeing 737 MAX Update
More regions around thew world continue to ground the Boeing 737 MAX plane due to technical issues that have potentially caused two tragic commercial airline crashes in the past six months. The European Union yesterday also chose to ground the model until these issues are addressed by Boeing BA .
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