US: Solid gains in October durables orders - Wells Fargo

According to analysts from Wells Fargo, the 4.8% rise in US durable goods orders report was largely driven by a surge in aircraft orders, but orders ex-transportation point to a modest turnaround in equipment spending for the fourth quarter.

Key Quotes: 

“Durable goods orders bested even our above-consensus estimate for October, rising 4.8 percent. A jump in aircraft lifted transportation orders 12.0 percent, even as orders for motor vehicles and parts fell 0.6 percent. 

“Ex-transportation, orders were up a solid 1.0 percent. The increase came despite another drop in defense spending (down 3.7 percent) after a surge this past summer. 

“On a three-month moving average basis, core orders are rising at a 4.4 percent clip and suggest equipment spending in Q4 is primed to rise for the first time in more than a year. Unfilled orders have also ticked up in recent months, which should help work down inventories.”