Wednesday's Markets Update (April 26, 2023)

27 Apr 2023 by rate3

On Wednesday, the Census Bureau surprised markets once again by reporting that Durable Goods for March recovered sharply to 276.4B. This news was accompanied by tech companies' positive earnings reports, with Meta's stock shooting up by 11.2 percent, surpassing the projected 2.2 EPS (earning per share) while 2.02 was initially expected. However, technical factors, such as the ongoing correction from yearly highs, forced NASDAQ (o: 11913, c: 11854) and BTC (o: 29965, c: 27884) into a range, with BTC recovering to 29K in after-hours trading.

The Census Bureau's Advance Durable Goods Report showed that new orders in March increased by 3.2 percent, rebounding from the previous month's decline of 1.2 percent. This exceeded market expectations of a 0.7 percent growth. The increase was primarily driven by the demand for transportation equipment, which rose by 9.1 percent. Specifically, there was a significant increase in orders for both civilian aircraft (78.4 percent) and defense aircraft (10.4 percent). Additionally, there was a 1.9 percent increase in demand for computers and electronic products. However, there was a slight decrease in demand for vehicles, which declined by 0.1 percent.

Overall, when excluding aircraft and defense capital goods, orders actually decreased by 0.4 percent in March, which was an improvement compared to the 0.7 percent decline in February. This data demonstrates that businesses' spending plans are still experiencing a decline, indicating a potential recession.

For reference: Orders for transportation are frequently influenced by major aircraft manufacturers. As an example, Boeing delivered 64 commercial jets in March. The Boeing 737-700 has an average listed price of under USD 90 million, while the Boeing 777-9 is priced at USD 442 million. The most popular commercial planes from Boeing are priced between USD 89.1 million and USD 112.6 million. It is common for aircraft to be acquired at prices lower than the listed price, with discounts ranging from 20 percent up to 60 percent.