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Durable goods orders reviewed – Nomura

Analysts at Nomura explained that the durable goods orders rose 1.0% m-o-m in June, below expectations (Nomura and Consensus: 3.0%), with the downside miss largely attributable to transportation-related orders.  

Key Quotes:

“Excluding transportation equipment, durable goods orders were up 0.4% m-o-m in June, mostly in line with expectations (Nomura: 0.3%, Consensus: 0.5%), following an upwardly-revised 0.3% increase in May (previously reported as 0%).”

“New orders for nondefense capital goods excluding aircraft were up 0.6% m-o-m, following an upwardly revised 0.7% gain (previously reported as 0.3%). Shipments of these goods were up strongly by 1.0%, above market expectations.”

“The solid gains point to robust growth in business equipment investment in Q2, consistent with still optimistic business sentiment.”

GDP tracking update:  

“Given soft net exports and inventory data, we lowered our Q2 real GDP forecast to 4.2% q-o-q saar (previously, 4.6%), which is scheduled for release tomorrow. If realized, this estimate would still be a very solid number, but we think the average Q1 and Q2 would be a better description of the current state of the US economy rather than Q2 per se.

 

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