Highlights of the July US durable goods report:

  • Prior capital goods orders nondefense ex-air +0.7% (revised to +1.4%)
  • Overall durable goods orders +2.0% vs -0.4% expected
  • Prior revised to 4.1% from 3.4%
  • Ex transport +0.6% vs +0.3% exp
  • Prior ex transport revised to +1.0% from +0.6%
  • Durable goods shipments nondefense ex-air +0.6% vs +0.4% exp
  • Prior shipments nondefense ex-air revised to +0.9 from +0.3%

Very strong report. All the readings were stronger than expected and they were compounded by positive revisions. The shipments reading bodes well for Q3 GDP.

The conundrum for stock markets here is that while a good report cools some nerves about the economy, it also raises the chance of a Fed hike. The initial reaction, however, has been to cheer the data and buy the US dollar.

It was the strongest core durable goods orders rise in 13 months.