Durable Goods Orders
This week’s calendar came to a close with the release of June’s Durable Goods Orders report at 8:30 AM ET this morning. It revealed a 9.3% decline in new orders for big-ticket products such as airplanes, appliances and electronics. This was a smaller than expected drop in orders with the median forecast around 11.0% lower than May’s orders. A secondary reading that excludes more costly and volatile airplane and transportation related orders was up 0.2% when analysts were expecting a 0.1% increase. These numbers are a sign the manufacturing sector was a bit stronger than thought last month. However, the results in this highly volatile data are within the variance range that prevents a strong reaction to the news. Because there is an expectation of large swings in this report, the difference between forecasts and actual results is not nearly as relevant as it would have been in many other releases. Therefore, we are labeling the data to be neutral to slightly negative for bonds and mortgage pricing.