US: Expect a solid rebound in durable goods orders – Nomura

Research Team at Nomura, expects a solid rebound in US durable goods orders in July as the recent data on industrial production of durable goods excluding motor vehicles showed a decent increase in July.

Key Quotes

“Moreover, the ISM manufacturing new orders index remains elevated. Taking these factors into account, we forecast a solid 1.5% increase in orders for durable goods excluding transportation following a 0.4% decline in June.

On transportation orders, we expect a solid rebound in July. Although weak vehicle assemblies suggest some slowdown in motor vehicles and parts orders, incoming data on nondefense and defense aircrafts and parts orders imply a strong positive payback in July following a decline in June. All in all, we believe total durable goods orders increased by 2.6% in July.”