Durable Goods Orders Experience Notable Decline in November

It’s Christmas Eve, and the markets are open until 1pm ET today. There are no economic reports on the calendar for this morning, as the November monthly read on Durable Goods Orders has been moved up from its original Tuesday release date.

Durable Goods Orders Decrease

In November, Durable Goods Orders fell by -1.1%, which was worse than the expected increase of +0.3% and significantly lower than the previous month’s +0.8%. Notably, when transportation is excluded, the indicator also slipped to -0.1% from a positive +0.2% in October.

Earlier this year, Durable Goods Orders showed promising improvements, peaking at +9.8% in July. Typically, this metric fluctuates around a neutral balance. While a slight dip may not be troubling, it’s important to monitor potential further declines in the future.

Consumer Confidence Declines

This week, a December report on Consumer Confidence revealed a decline, with the headline index falling to 104.7, which represents a decrease of -8.1 points compared to the previous month. Additionally, the Present Situation Index — which gauges consumers' views on business and job performance — dropped by -12.6 points, landing at 81.1. According to the report, a reading around 80 indicates that consumers may be wary of an upcoming recession.

Despite these numbers, the data does not definitively signal a downturn for the overall economy. With an incoming presidential administration promising significant federal changes soon, the stock market appears to be pricing in some expected shifts. However, as the new president approaches office, investors will have ample time to reassess their positions.

Christmas Eve Stock Market Outlook

It is likely that trading volumes will be low today, as many market participants are off for the holidays. The Dow Jones Industrial Average has seen a three-day winning streak, although this rebound mostly corrects losses from nearly two weeks of declining prices. Currently, the Dow is down by 24 points, contributing some negativity to the S&P 500, Nasdaq, and small-cap Russell 2000 this morning.

Overall, major indices have decreased over the past trading week, but the Nasdaq still shows a monthly gain of +4.4%. Bond yields are on the rise, now at 4.61% for the 10-year and 4.35% for the 2-year. Furthermore, the yield spread has begun to widen, shifting from an inverted curve that previously hinted at a potential recession which never occurred. The bond market is now adjusting to a slower forecast for Federal Reserve rate changes, among other factors.

As we celebrate this holiday season, we wish everyone a joyful time and look forward to returning on Thursday for continued analysis.

Durable, Goods, Orders