NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
Among the posts this past week were entries about durable goods, consumer confidence and personal income growth.
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Parsing the Durable Goods Data
Originally published on Tuesday, Dec. 24 at 8:50 a.m. EDT.
Durable goods orders in November were strong, rising 3.5% (headline) and 1.2% (ex-transports) vs. expectations of up +2% (headline) and +0.7% (ex-transports). Also noteworthy was the 4.5% upwardly spike in nondefense capital goods ex-aircraft after two months of declines, well above the estimate of up 0.7%. All this also follows an upward revision to October.
Shipments of core goods, which get plugged into GDP, were up 2.8% vs. the estimate of up 1%. Leading the gains in orders were nondefense aircraft, autos, machinery and computers/electronics.
Bottom line: The capital expenditure spend in November was solid and has been the key missing piece to the economic recovery.
Most are optimistic on capex for 2014.
I am less optimistic, and the pattern of capex spending is one of my surprises for 2014.
Two key tax benefits on capital projects are set to expire on Dec. 31, and that possibility may have triggered the big jump in November, as companies scramble to take advantage of them as Congress has not gotten around to extending them.