Factory Orders Rise More Than Estimates

- Factory Orders for July rose 1.3% versus estimates of 1.0% and an upwardly revised 2.1% increase in June.

BOTTOM LINE: Factory orders in the US increased more than forecast in July, Bloomberg reported. Excluding demand for transportation equipment, which tends to be volatile, orders gained 1% versus a 2.7% gain in June. Factory inventories increased .5%, led by metals and machinery, and manufacturers had enough supplies on hand to last 1.2 months at the current sales pace versus 1.22 months in June. Bookings for capital goods ex military hardware, a gauge of future business spending, jumped 6.3% in July. Mortgage Applications jumped 7.5% this week, the largest gain since the first week of June. The Citi eurozone economic surprise index is now -151.20, while the US economic surprise index is +71.60. The US Dollar Index is rising another .24% and the 10-year yield is down 3 basis points to 3.70% on today’s news. I expect Factory Orders to continue to trend higher over the intermediate-term on inventory rebuilding, better-than-expected demand and lower input prices.