The Capital Goods Beat
Capital goods fared no better than most other sectors in the latest durable goods report. Shipments broke their streak of double-digit growth, and new orders growth was off sharply.
In fact, when defense orders are stripped out the remaining orders were flat.
Turning to specific sub-groups, manufacturing shipments were steady, new orders growth plummeted and inventories crept up.
Shipments and orders for machinery both appear to be slowing, although the double-digit year/year growth remains reasonable for the capital goods sector.
Electrical equipment actually saw a decline (not just a slowdown) in orders, likely due to the housing slowdown.
With defense being the strong point, it is interesting to note that Ceradyne, Inc. (CRDN) received its initial order for boron carbide/aluminum metal matrix composite (MMC) components from Transnuclear for more than $1.5 million. The MMC components are for dry storage of spent nuclear fuel and are scheduled for delivery by the end of second-quarter 2007. Still a long way to go before it makes up for slowing body armor sales, though.
Transportation Equipment
EgyptAir orders Six Embraer 170s
Embraer expects backlog to grow for small jets Embraer Still Cruising (The Motley Fool)Homebuilders
Homebuilders Offer Garages, Sod to Lure Buyers Amid US Slump - BloombergDisclosure: Author is long Ceradyne shares, which are fully offset by a short position in call options.
