{"id":189417,"date":"2023-04-26T12:45:00","date_gmt":"2023-04-26T16:45:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=189417"},"modified":"2023-04-27T09:42:50","modified_gmt":"2023-04-27T13:42:50","slug":"boeing-737-max-aircraft-orders-propel-durable-goods-apr-26-2023","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/boeing-737-max-aircraft-orders-propel-durable-goods-apr-26-2023\/","title":{"rendered":"Boeing 737 Max Aircraft Orders Propel Durable Goods: Apr. 26, 2023"},"content":{"rendered":"\n

Consumers just can\u2019t get enough travel, compelling Boeing to increase the pace of producing the 737 Max aircraft. On the same day that Boeing reported its quarterly earnings and just a day after General Electric (GE) said it has increased deliveries of jet engines, the March Durable Goods<\/a> report posted a big beat driven by aircraft orders. However, the core capital goods details within the report depicted weakness with business investment, which is offsetting some of the optimism from yesterday afternoon\u2019s Big Tech earnings.<\/p>\n\n\n\n

Durable goods weakness appears to be moderating investor optimism following tech earnings yesterday. With a tailwind of strong aircraft orders, the March headline Durable Goods increased 3.2% month-over-month (m\/m), surpassing the 0.7% expected by a consensus of analysts and illustrating the first gain this year with January and February recording declines. On a less optimistic note, excluding transportation, orders only rose 0.3%. Core Capital Goods, which exclude defense orders and aircrafts and serves as a proxy for business investment, declined 0.4% m\/m, the second consecutive month of decline just one day before first quarter GDP is reported.<\/p>\n\n\n\n

Aircraft and parts notched notable m\/m increases, with the nondefense sector growing orders by 78.4% while defense was up 10.4%. Computers and electronics products also contributed to gains albeit more modestly, rising 1.9% during the period. Defense capital goods, communications equipment, and motor vehicle and parts orders weighed on results, declining 0.5%, 0.2% and 0.1% respectively.<\/p>\n\n\n\n

Markets are being pulled up by tech shares this morning while cyclical stocks are underperforming with weak business investment creating concerns that GDP growth may be softening. While the Nasdaq Index is up 1.15% propelled by Microsoft and Alphabet\u2019s strong earnings, the cyclically tilted Dow Industrials Index and the Russel 2000 Index are down 0.1% and 0.2%, respectively. The S&P 500 was also down this morning before finding support at 4060. It\u2019s now up 0.3% to 4083 with the 4100 level likely to provide some daily resistance. Bonds are relatively quiet except at the shortest end with the 1-month Treasury duration down 23 basis points (bps) while the dollar is down 0.5% as market odds are supporting the notion that the last Fed rate hike of the cycle will occur next week. Following a large price decline driven by demand concerns yesterday, WTI crude oil is relatively unchanged at $77.10. <\/p>\n\n\n\n

Boeing and GE are clearly riding the wave of increasing travel, while Visa is also a beneficiary of consumers venturing beyond their home countries as illustrated by the following results:<\/p>\n\n\n\n