US durable goods orders drop sharply in July

Durable Goods Orders Plunge in July

By Laila Eid | @Laila Eid | 24 August 2023

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  • U.S. indices remain stable during today's trading

  • U.S. 10-year bond yields rose after experiencing a decline of over 3%

  • The durable goods orders index contracted by 5.2% on a monthly basis

US indices hold steady as attention turns to Jackson Hole meeting

In today's trading session, the US indices are demonstrating stability, maintaining a steady course. The Dow Jones Industrial Average is currently hovering around the 34428 level.

Shifting focus to the upcoming event, the spotlight will soon be on the gathering of prominent central bankers at Jackson Hole. Federal Reserve Chair Jerome Powell is scheduled to deliver a speech on Friday, and this event is anticipated with keen interest.

In recent developments, the Nasdaq experienced a rally in the previous trading session. This surge was attributed to the robust outlook presented by Nvidia Corp. Notably, Nvidia witnessed a significant 7.9% increase in premarket trading. Alongside Nvidia's surge, shares of Microsoft Corp. and Inc. also saw premarket positive performance.

The focal point has rapidly transitioned to the performance of major technology corporations. The spotlight has once again turned towards the question of whether the earnings generated by these tech giants possess the capability to propel the stock market in a forward direction.

While concerns surrounding escalating bond yields took center stage in discussions during the past week, the narrative has swiftly shifted back to the performance of big tech companies. After experiencing a decline last week, attributed to the increase in US bond yields.

Adding to the dynamics of the market, US 10-year yields initially fell by over 3% this week but subsequently rebounded.

Decline in unemployment claims and durable goods orders

In the week ending August 19, initial claims in the US job market displayed a promising decrease, resting at 230,000, which marked a notable drop of 10,000 from the revised level of the previous week according to US department of labor.

Shifting gears to another sector, the new orders for manufactured durable goods experienced a sharp decline of 5.2 % in July 2023 when compared to the preceding month, which is the largest contraction in durable goods orders since May of 2020. This downturn followed a revised growth of 4.4 % in June, which had been adjusted downwards.