US durable goods orders: ex-transportation and core capital goods

What the report measures

Durable goods include machinery, computers, electrical equipment, vehicles and aircraft. The advance report gives new orders, shipments, unfilled orders and inventories, in dollars and seasonally adjusted. A more complete version comes later in the full factory orders report, and the advance figures are revised.

Because a handful of aircraft orders can be worth billions, the transportation category makes the headline extremely volatile from month to month. A large headline move is often just the timing of aircraft orders.

The lines that carry the signal

Why futures react

Business investment is one of the swing components of growth. A surprise in core capital goods changes estimates of equipment investment and therefore of GDP, which affects earnings expectations for index futures and, to a lesser degree, the rates outlook for Treasury futures. The headline alone moves futures less than its size suggests, because experienced participants discount aircraft-driven swings.

Order flow when the headline misleads

The durable goods release is a textbook case of a first reaction that can reverse. Automated readers may act on the headline in the first second; once the ex-transportation and core capital goods lines are read, the flow can turn. On the footprint, that appears as a release bar with one-sided aggression, followed by bars where the opposite side becomes aggressive and price returns inside the pre-release range.

Durable goods often shares the 8:30 ET minute with weekly jobless claims or other data, so check the calendar before crediting the move to one number. When the headline and core lines agree, the reaction is usually more orderly: a sweep, then continuation or absorption depending on who holds the next levels.

In Senzoukria

In the News calendar, rows whose name contains durable goods are described as “Capex pulse — business investment gauge.” Core and headline lines can appear as separate rows at the same time, each with its forecast and previous value; enable the Medium impact level if one of them is filtered out.

The Absorption Zones overlay marks runs of body levels where one side's volume dominated the other by a ratio and extends them to the right until price closes beyond; after a headline-driven spike, a zone at the extreme records where the first burst was absorbed.