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Durable Goods Upside Surprise Preludes To Economic Growth Or Toyota Losses? (TM, F, CAT, HOG)

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Durable Goods Upside Surprise Preludes To Economic Growth Or Toyota Losses? TM, F, CAT, HOG

Durable Goods Orders are released by the Bureau of Census on a monthly basis. Today's numbers were twice of what was expected, 3.0%. Consensus estimates were looking for a 1.5% increase. This is a figure that reflects near term orders on durable goods by domestic manufacturers. This could be a sign that companies such as Ford Motor Company (NYSE: F), Caterpillar Inc. (NYSE: CAT), and Harley-Davidson, Inc. (NYSE: HOG), are seeing increases in demand.

Ford Motors has done a wonderful job cutting down on their handling of inventory and are much leaner. This means a ramp up in demand for durable goods from domestic manufacturers is a better indicator of near term demand for products as inventory is shrinking through sales growth.

This positive number in Durable Goods Orders could prelude to sales doing better than expected for companies like Ford and Caterpillar. On a contrary standpoint, it may not be sign of economic growth either. It could be further signs that Toyota Motor Corporation (NYSE: TM) could be losing market share (9 Reasons To Run From Toyota's Stock).

The fact that initial claims for unemployment rose by 22,000 to 496,000 could support this speculation. Durable goods by domestics growing as a result of gaining market share, not the economy recovering, could therefore make complete sense. We'll have to wait to see how next quarter's earnings reports will be for Ford, Harley, and Caterpillar to see if the jump by 3.0% was domestic automaker related, or economic growth related.

Currently, TM is down -1.36%, F is down -1.07%, CAT is down -2.65%, and HOG is down -1.75%.

Posted-In: Long Ideas News Short Ideas Rumors Economics Intraday Update Markets Movers

 

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