Analysts at Wells Fargo point out that Factory Orders in the US rose in May 0.4% as nondurables climbed 1.1% percent and core capex orders were revised up. They warned that equipment spending still looks to be off the pace set in H2-2017.
Key Quotes:
“Stronger growth in durables orders relative to last week’s advanced report and a 1.1 percent jump in nondurables explain the upside surprise.”
“Core capital goods orders in May were revised up from an initially-reported decline to a 0.3 percent gain. That was in part at the expense of April’s orders, however, leaving the three-month average annualized pace at 4.7 percent.”
“Although a slowdown in orders since the end of last year indicates equipment spending will not hit the double-digit pace registered in the second half of 2017, we still expect to see investment rise at a respectable clip in the second quarter.”
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