January Factory Orders Dragging on Growth

Bloomberg had a consensus estimate of -2.2% on the headline reading from its pool of economists, with a range of -4.5% to a gain of 0.5%. Dow Jones was calling for a headline consensus of -2.3% for January factory orders. The December report initially was shown to be up by 1.8%, so the drop was expected.

What is interesting is that the coming spending sequestration was not as much of a very negative issue in January compared with the fiscal cliff resolution that happened in the final hours of December. Still, as we saw with durable goods, there had been some serious channel stuffing in November and December based on the expectation that spending may slow.

Today’s report was delayed a couple of minutes from the usual 10:00 a.m. EST posting time. We do not expect this report to have much of an impact, even at the DJIA hitting new highs. The DJIA is up 50 points at 14,304 and the S&P 500 is up 3.50 at 1,543.29.