Factory Orders Decline, Pending Homes Sales Fall Slightly

- Factory Orders for January fell 4.5% versus estimates of a 5.4% decline and an upwardly revised 1.6% increase in December.
- Pending Home Sales for January fell 1.1% versus estimates of a .3% increase and an upwardly revised 2.6% decline in December.

BOTTOM LINE: US factory orders fell in January as bookings for Boeing(BA) aircraft declined. Orders, excluding transportation equipment, rose 1.6%, Bloomberg reported. Orders for household appliances jumped 16% in January and orders for industrial machinery soared 55%. Orders for non-defense capital goods excluding aircraft, a gauge of future business spending, rose .1%. The inventory-to-shipments ratio was unchanged at 1.15 months in January. I expect factory orders to rebound nicely in February on a jump in aircraft production.

Contracts to purchase previously owned US homes fell for a fifth straight month in January as higher prices and mortgage rates discouraged buyers, Bloomberg said. Pending home sales rose 6% in the Midwest and .4% in the Northeast. Sales fell 1.9% in the West and 5.1% in the South. I continue to believe housing is slowing to more healthy sustainable levels.