We have just seen the highly volatile Durable Goods numbers released this morning. The numbers from the Commerce Department came in at -0.8%. This was a bit better than expectations as Bloomberg had forecasts set at -1.8% and Dow Jones had estimates at -1.5%. But the bad notion here is that we also saw a sharp decline in the February levels from a prior 3.4% down to 2.1%. On an ex-Transportation basis, the number came in at -0.6%, and the number for February was revised down to +2.0%. The problem with these numbers is that the revision being so much lower brings that bar down and should act to take away some of the enthusiasm that was initially seen on the reports.
To exhibit just how low these numbers are, this is a year-over-year drop on an unadjusted basis of 27.1%. This also sets up the possibility that economists will have to lower their GDP expectations based on the much lower revision from February. So far this has not taken much away from equity futures as DJIA futures are still up about 20 points and the S&P futures are up almost 3 points.
JON C. OGG
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