Skip to main content

Durable goods report lights up Wall St - but who's lurking in the shadows?

"Was a sunny day, not a cloud in the sky. Not a negative word was heard." - Paul Simon, Was A Sunny Day
Today's durable goods report surprised investors by posting a rise of 1.3% in new orders for the month of July. This was way more than the anemic 0.2% expected by economists. Shipments clocked with a robust gain of 2.5%.

Digging down a level, it turns out that much of the gains were due to transportation equipment, specifically aircraft. New orders were up 28%. (Now if Boeing could just deliver...)

Excluding the volatile transportation sector, new orders were up only 0.7%

Exports were generally identified as the driver behind these good numbers. This led some analysts to worry that we are unlikely to see growth like this continue with world economies slowing and the dollar rising.

In the meantime, though, it was time for stocks to bask in the sun; the major averages all made healthy moves to the upside today. Still, there were a few sectors casting shadows on the good times.

Technology fading into the darkness?

I was surprised to see the mixed up situation in the Tech sector. At the Computers and electronic products summary line, new orders actually fell, sliding 1.3%. Drilling down into the sector a little further we see that new orders for Computers and related products were down 10.7%, more than twice the drop we saw in the May-June comparison. Shipments for Computers were down 12.9%.

The bright light in the Tech sector turns out to be semiconductors with shipments in July up a whopping 33.9%.

After digesting this data, though, the question is whether it is reasonable to continue to regard Tech as a "safe" sector.

Defense on the decline?

Who else was stuck in the shadows? New orders for Defense capital goods were down 25.7%. (George Bush and the Pentagon must be running out of juice...)

Anomaly in the auto industry?

Motor vehicles showed an increase of 1.2% in new orders. This, at a time when GM and Ford are experiencing plunging sales and burgeoning losses. Is this just the result of a strike ending at an axle plant that supplies GM? If so, don't expect a positive number next month.

In summary --

Industrials managed to eke out a decent gain today and tech stocks rose nicely along with everyone else though, surprisingly, they did not rise as much as the financials did. All in all, a good durable goods report with just a few pockets of weakness. And that's all it took to part the clouds on Wall Street.

Comments

Popular posts from this blog

Running TradeRadar on Windows 7 and Windows 8

Development of the original TradeRadar Stock Inspector software was begun back in the days before Windows 7 and Windows 8 were available.

As these newer versions of Windows have become more popular, we have heard from some users that they are having problems installing and running TradeRadar on their newer PCs.

The good news is that TradeRadar will work just fine on Windows 7 and Windows 8. All you have to do is adjust the Windows Compatibility Settings to ensure TradeRadar runs as intended.

It is recommended that you can apply Compatibility Settings when running the initial installation; however, it is also possible to apply Compatibility Settings after the program has been installed.

Prior to installation
After downloading the install program, go to the folder where you have stored the TradeRadarStkInsp_7_Setup.exe or TradeRadarStkInsp_7_PRO_Setup.exe executable. Right-click on the executable file and select Properties. Click the Compatibility tab. Adjust the Compatibility mode to …

Durable Goods report for Sept just so-so but Computer segment is on fire

The Durable Goods advanced report for September 2011 was released on Wednesday.

I like to dig into the Durable Goods report because it can be useful for seeing how tech in aggregate is performing and how the sector may perform in the future. I always focus on two particular measures: shipments and new orders. Let's see how it played out last month.

Shipments -- 

I generally give less importance to Shipments since this is a backward looking measure reflecting orders that have been confirmed, manufactured and shipped. It's similar to earnings reports -- it's good to know but the data is in the past and we're more interested in the future. The following chart shows how September shipments looked for the overall tech sector:


Results for the overall tech sector were a bit weak but take a look at the next chart which tracks the Computers and related products segment:


Results here were actually quite good and, to make things even better, the previous month was revised upward.

N…

Alert HQ has moved!

End of an era!

This site was started way back in 2006/2007 to showcase my blog posts and the Alert HQ buy signals and sell signals. Alert HQ grew to include other kinds of stock alerts including Swing Signals, Trend Busters, Trend Leaders, Cash Flow Kings and more.

In the meantime, I built a sister site, TradingStockAlerts.com and I started using some of the same Alert HQ content over there. As a result, I am discontinuing the Alert HQ data here at Trade-Radar.com

The good news, however, is that all the Alert HQ signals and stock screens are still completely free. In addition, the pages have been enhanced so that you can hover over a stock symbol and a small chart will pop up so you can get a quick look at the stock's recent price action. If you click on a symbol it will take you to a page with plenty of financial and technical analysis information (still free!) as well as a larger chart that you can play with in terms of adding or deleting indicators, moving averages, etc.

Click …