Durable Goods Orders Disappoint, but..

The Durable Goods Orders disappointed investors, leading a sell off in premarket.

This is seen very negatively, as the core durable goods orders decline 3.8%. This means that manufacturers are slowing down, most probably due to higher inventories in the end markets.

Durable goods orders increase, at a slow pace of 0.3% instead of analysts expectation of 3%.

However, analysts expected an increase of 3% as they assumed that the orders declined 1% last month. The previous report was revised to a decline of only 0.1%.

This means the orders are still higher than that of Q2. There is still growth. The orders did not contract, the economy is still growing.

The exDefense transport orders growth is 8%, vs only 2.6% last month.

We have to watch the next crucial data – the new Housing sales.

This data is more important than the dismal data yesterday, this is because New Home sales is a leading indicator, vs the existing home sales which has a lag time of 1 to 2 months.