Ford is joining Best Buy and Bed Bath & Beyond in taking advantage of their competitor’s woes while at the same time executing well thru a difficult economy and its stock is being rewarded after earnings.
European stocks are strong after Germany’s IFO, their main business confidence #, rose to the highest level since Nov at 83.7, 1.4 pts more than forecasted. The Euro is at a 1 1/2 week high vs the US$ in response.
Q1 GDP in the UK fell at the biggest pace since ’79, by 1.9% q/o/q, .4% more than expected and Moody’s made cautious comments on their sovereign credit outlook although they remain firmly Aaa.
Like the anxiety of opening up the letter from the college you really wanted to go to, banks get to hear how they did in the ‘stress test.’ This afternoon, the rest of us get to hear what assumptions were used and analysts can go to work to see who needs what.
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March Durable Goods were down but better than expected. The headline figure was down .8% vs expectations of down 1.5% and ex transports, orders fell by .6% vs forecasts of down 1.2%. HOWEVER, Feb was revised down sharply to gains of 2.1% headline and 2% ex transports from up 3.4% and up 3.9%. Non Defense Capital Goods ex Aircraft, the pure cap ex component, rose 1.5% and is up for a 2nd straight month but after sharp drops in Dec and Jan. Shipments, which gets directly plugged into GDP, fell 1.7% and is now down 6 months in a row. We thus need to see if the orders over the past two months turn themselves into shipments as opposed to getting canceled. The inventory to shipments ratio continued higher, rising to 1.90 from 1.88 and is at the highest level since 1992. The early hopes of economic stability have been focused on inventory replenishment and today’s data point should be included in that analysis with the outcome still very unclear.
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