Print Shop: What to Expect in the Durable Goods Numbers

Padinha's spreadsheet says expect a small rise, but intuition has him thinking big.
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Thievery

JACKSON HOLE, Wyo. -- Nothing is fine.

I am torn.

The November

durable goods

numbers will be

released tomorrow.

(a) The market is looking for a 1.1% print.

(b) My spreadsheet will produce a number that large only if I torture it.

(c) A couple of good forecasters are looking for an increase twice that size (and then some).

I am always happy to scrap one of my estimates when there exist what seem to be better guesses around, and this is one of those times. I am betting on big tomorrow for two reasons.

The first is that I find the composition of the large-number forecasts fetching. The economists at

Salomon

, for example, have orders for durables rising more than 3%, excluding defense and excluding transport. The thinking here is that a big number that comes mostly as a result of heightened interest in tanks and planes wouldn't have nearly the lasting impact that a broad-based one will.

The second is the attractiveness of the risk-reward balance. The mood in Treasuries is currently so sour that good news helps relatively little (when it helps at all) and bad news hurts relatively lots. The market is therefore likely to get little (if any) mileage out of a kind print tomorrow, but a big number would (according to one of your narrator's favorite bond guys) "cause the ultimate puke."

Anyway.

There are no guarantees here. There never are. As far as bets go, though, this seems like a good one to me.

And yes. If the number prints small I will kick myself hard for not listening to my sheet.

Epilogue

This is nothing more than gambling.

That means it is by definition risky.

And that means no crybabies in the casino.

Side Dish

This is the kind of mail I will get if the number does print little.

Hey economics guru?

You should either keep your Mouth shut or change your name to The Invisible Dumbass.

I love it when you write up little data previews like this because I have been tracking them all year and you're always wrong. Every time you predict a big number it ends up coming in small and then stocks rally huge.

This morning I made a killing on fill in the name of any three crap stocks you can find on select boards around here and I owe it all to you. Congratulations on yet another blown call. And keep up the great work, brainiac.

Hey.

What's a guy to do?

It's funny because it's true.