CIBC Research discusses its reaction to today's US durable goods report for the month of July.
"Durable goods orders were the definition of a mixed bag in July, with the headline and core capital goods orders beating expectations, but the ex-transport and shipments data falling short,' CIBC notes.
"Headline orders rose 2.1% on the month, lifted by a rise in the volatile aircraft component. Core capital goods orders (non-defense ex-aircraft) also posted a respectable 0.4% gain, although that came off the back of a downwardly revised 0.9% increase (prev. 1.5%) in the prior month. The 3-month annualized rate for that breakdown shows growth, albeit slim, of 1.3%. However, core capital goods shipments disappointed, falling 0.7%, to leave the 3-month pace in that area also barely higher. As such, it appears that while business investment may return to being a positive for growth in Q3 at this early stage, it isn't likely to be a big driver. Limited market reaction expected to these rather mixed results," CIBC adds.