Skip to main content

Durable goods report reveals more tech weakness

The US Census Bureau just released the advance Durable Goods report for September.

It shows that the tech sector took another beating.

At a summary level of Computers and Electronic Products, Shipments were down sequentially 2.1% and New Orders were down 1.4%. This was after a terrible August number where shipments were down 5.6%; therefore, we are seeing further declines in September from an already bad number.

Looking at the sub-categories, first up we have Computers and Related Products. In this sector we see Shipments were finally up slightly at 0.8% after two bad months in a row but New Orders were down 2.1%. Given that New Orders were down 13.1% in July and up only 0.7% in August, we again have further deterioration from a prior run of bad numbers.

We have mixed results in the Communications sector where a 2.6% gain in Shipments was recorded while a big 14.6% drop in New Orders was registered.

Finally, we have Semiconductors. New Orders are not tracked in this sector but Shipments are. Back in July, Shipments grew a whopping 38.9%. Since then we have registered a drop of 18.6% in August and another drop of 13.6% in September.

Conclusion --

The tech sector is on the way to a weak fourth quarter. Now is typically when shipments and new orders start ramping up as manufacturers begin production of the consumer electronics products that are slated for holiday purchases.

Semiconductors are often seen as the leading indicators. At the heart of consumer electronics are the chips and integrated circuits. If they are not being shipped by now in increasing quantities, it suggests that manufacturers have lowered expectations for sales this holiday season. That can't be good for tech stocks.

Comments

Speedmaster said…
Did you see this?
http://amateureconblog.blogspot.com/2008/10/volvo-truck-sales-plunge-997.html
Yes, I saw the headline. Now that I've read it, I'm even more worried about where we go from here. Still, my signals say a near term bottom is being formed. Time will tell.

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 …