Core durable goods orders weaken
The poor durable goods orders number in December is weak because the phase one trade deal was pre-announced early in the month. That should have spurred some kind of rebound in business confidence and investment.
It's still early but the returns in December's report were poor. Core orders, which exclude defense and aircraft orders, were down 0.9%. That's the worst monthly reading since April 2019 and compares to +0.2% expected.
One particularly soft spot was machinery orders, which were down 1.1% but the weakness was broad based with vehicles/parts down 0.9% and electrical equipment down 0.6%. A lone bright spot was computers/electronics at +0.8%.
Some are pointing to the -74.7% drop in non-defense aircraft orders due to a drop at Boeing but the core numbers exclude that.
The market is dialed into coronavirus news at the moment and is feeling a bit better about the situation. However this number may help to cap any relief rally. USD/JPY has flattened out at 109.02 after the data and the slide in gold has halted.
Here's economist David Rosenberg highlighting the weakness:
