主题：03/25/2009 Market View -- 宁子

February durable goods orders (products lasting 3 or more years) jumped 3.4% versus the -5.2% expected and upwardly revised -5.3% in January. Ex-transportation orders posted a solid 3.9% advance (-2% expected). The overall number was the first advance in 7 months and the largest in a year. Ex-transportation showed the strongest gain since August 2005.

The components were solid with business investment up 6.6%. Of course it was down 6.6% in January so the rebound is still looking at a mountain to climb in recovery, but that is how things start. Computers rose 10.5% and general machinery gained 13.6%.

Respectable, but as noted, it has been a long slide. When you piece it together with the other data, however, it takes its place in the lineup of improving results. Retail sales, same store sales, factory orders, regional and national manufacturing, and existing home sales all show improvement off the harsh declines. As one of the traders says, they don't stink as bad as they did. Again, the bottom has to start somewhere and we are seeing a firming of the data even as the market has put in almost a month of stabilization and upside itself.

New home sales up 4.7%.

New sales topped expectations as well, another piece of data supporting the notion of a turn or bottoming in the economic data. Then again, it was also 41% lower year/year. If durable goods have a mountain of prior highs above it, new home sales cannot even see the peak. And even with the gain the level is 9% below December levels. Maybe a turn, but it is small and very recent.

Inventory is also an issue. The supply of new homes stands at over a year (12.2 months), meaning at the current consumption rate it would take that long to sell them all with no new homes built. That beat January's 12.9 months but December was lower than both at 11.6.

Low mortgage rates will help, but there is a lot of inventory to hack through. As with everything it is always the worst before it starts to improve. This is about as bad as we have ever seen the market, but as always, it is still a regional phenomenon. Sales fell 3.3% in the Northeast and 9% in the Midwest, but they rose 9.7% in the South and 6.6% in the West. The South shall rise again they say, and in terms of home sales it never really fell during this bust though it did slow.