Durable Goods Orders Slow, New Home Sales Soar, Distillate Inventories Rise

- Durable Goods Orders for July fell 4.9% versus estimates of a 1.5% decrease and an upwardly revised 1.9% gain in June.
- Durables Ex Transportation for July fell 3.2% versus estimates of a .8% fall and an upwardly revised 3.6% gain in June.
- New Home Sales for July rose to 1410K versus estimates of 1328K and 1324K in June.
- The EIA reported crude inventories rose 1.85 million barrels vs. estimates of a 100,000 barrel increase. Gasoline inventories fell 3.25M barrels vs. estimates of a 1.5 million-barrel decline. Distillate inventories rose 1.43 million barrels vs. estimates of a 1.75 million-barrel increase.

BOTTOM LINE: US orders for durable goods declined more than forecast in July after a three-month surge, reflecting less demand for aircraft, computers and communications equipment, Bloomberg reported. Orders for non-defense capital goods excluding aircraft, a proxy for future corporate investment, declined 3.7% last month, the largest amount since October 2004.

US new home sales unexpectedly rose to a another all-time high last month as mortgage rates below 6% and steady employment gains sent American streaming into the housing market, Bloomberg said. The median price of a new home fell to $203,800, the lowest since December 2003. New Home Sales rose 36% in the West and 10.1% in the Northeast. However, they fell 13.5% in the Midwest and 3.5% in the South. Finally, the supply of new homes for sale at the current pace fell to 4 months from 4.1 months in June.

Oil is trading modestly higher on the inventory report. I continue to believe a meaningful decline in crude will begin over the next 6 weeks as terrorism/hurricane fears peak and demand for oil falls more than expected during the fourth quarter.