US Durable Goods Data Indicates Increased Business Spending
$DIA, $SPY, $QQQ, $VXX
New orders for Key US-made capital goods rose less than expected in March, but a 2nd straight monthly increase in shipments suggested business investment accelerated in Q-1 behind a recovering energy sector.
While other data relieved Thursday showed a bigger-than-expected increase in 1st-time applications for unemployment benefits last week, the trend remained consistent with tightening labor market conditions.
The US Commerce Department said non-defense capital goods orders ex-aircraft, a closely watched proxy for business spending plans, increased 0.2% last month after gaining 0.1% in February.
Shipments of these core capital goods rose 0.4% after jumping 1.1% in February. Core capital goods shipments are used to calculate equipment spending in the government’s GDP (gross domestic product) measurement.
March’s modest increase suggests a loss of momentum in the manufacturing sector after recent strong growth.
Manufacturing, which accounts for about 12% of the US economy, is being underpinned by the energy sector revival.
Business spending on equipment is expected to have accelerated from Q-4 annualized 1.9% growth pace.
The US economy turned in the weakest performance in 3 years in Q-1 as consumers sharply slowed their spending.
GDP, the total output of goods and services, grew by just 0.7% in Q-1 following a gain of 2.1% in Q-4, the US Commerce Department reported Friday.
The slowdown primarily reflected slower consumer spending, which grew by just 0.3% after a 3.5% gainer in the prior Quarter. It was the poorest showing in more than & years. Analysts blame in part the unusually warm Winter, which meant less spending on utility bills.
Economists believe the slowdown will be temporary. They forecast GDP growth will rebound to 3% or better in the current Quarter.
Friday, the US major stock market indexes finished at: DJIA -40.82 at 20940.51, NAS Comp-1.33 at 6047.59, S&P 500 -4.57at 2384.20
Volume: Trade on the NYSE came in heavy with 1.33-B/shares exchanged.
- NAS Comp +12.3% YTD
- S&P 500 +6.5% YTD
- DJIA +6.0% YTD
- Russell 2000 +3.2% YTD
|HeffX-LTN Analysis for DIA:||Overall||Short||Intermediate||Long|
|Neutral (0.20)||Neutral (0.23)||Bullish (0.27)||Neutral (0.10)|
|HeffX-LTN Analysis for SPY:||Overall||Short||Intermediate||Long|
|Neutral (0.23)||Neutral (0.12)||Bullish (0.31)||Bullish (0.25)|
|HeffX-LTN Analysis for QQQ:||Overall||Short||Intermediate||Long|
|Bullish (0.31)||Neutral (0.21)||Bullish (0.46)||Bullish (0.25)|
|HeffX-LTN Analysis for VXX:||Overall||Short||Intermediate||Long|
|Bearish (-0.26)||Neutral (-0.10)||Bearish (-0.35)||Bearish (-0.33)|
Have a terrific weekend,
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