Source: Wall Street News Author: Zhao Ying
Despite high interest rates and uncertain economic prospects, companies are investing heavily in production equipment.
The increase in US commercial investment in April exceeded expectations, indicating that despite high interest rates and uncertain economic prospects, companies are still investing heavily in production equipment.
On Friday May 24, the US Department of Commerce released data showing that the initial value of US durable goods orders in April was 0.7% month-on-month, exceeding market expectations of -0.8%. Compared with the cooling of the previous value, the previous value dropped sharply from 2.6% to 0.9%. Orders for durable goods have been lowered 9 times in the past 14 months.
The initial value of US durable goods orders excluding transportation in April was 0.4% month-on-month, which also exceeded expectations by 0.1%. The previous value remained unchanged at 0.2%.
US core capital goods orders in April — orders for non-defense durable goods excluding aircraft increased 0.3% month-on-month in April, exceeding market expectations by 0.1%. The previous value was revised down from 0.1% to -0.1%.
It is worth mentioning that orders for core capital goods are an important part of calculating equipment investment in government GDP reports. Earlier, the Atlanta Federal Reserve's GDP forecast showed that corporate equipment spending may rise slightly in the second quarter.
After the release of durable goods order data, the US dollar index declined slightly in the short term and is now reported at 104.83. US stock futures rose slightly in the short term, while Nasdaq 100 futures rose 0.3%. The yield on US 10-year Treasury bonds declined in the short term and is now at 4.495%. Spot gold did not fluctuate much in the short term and is currently reported at $2338.56 per ounce.
Commercial aircraft orders fell 8%, and orders for automobiles and machinery increased
Looking at the breakdown, orders for various categories, including automobiles, communication equipment, and machinery, have all increased to varying degrees, reflecting the broad investment needs of enterprises.
The report shows that despite high borrowing costs and rising investment prices, companies are still committed to long-term investments. Companies are wary of capital expenditure, but under the backflow trend, many are seeking to increase productivity and production capacity.
The US Department of Commerce report shows that after a steady increase in the first two months, commercial aircraft orders fell 8%, and commercial aircraft orders were unstable every month.
Data from the Ministry of Commerce also showed that Boeing received only 7 new orders in April, a sharp decrease from 113 in March. Boeing management warned that production may be at an unstable pace in the first half of 2024, and that the company needs to step up defect inspections and rearrange production steps, while also being constrained by a shortage of suppliers.
Overall, the prospects for the recovery of the manufacturing industry still have reference value. According to the American Institute for Supply Management (ISM) data, manufacturing activity contracted in April after expansion in March, for the first time since 2022, but the S&P Global Survey showed that manufacturing output growth accelerated in May.
edit/lambor