Here are updated thoughts going into the Osaka G20 and Trump/Xi meeting on Saturday and as a subscriber, you get a chart not made available to the CNBC audience.
Manufacturing capital spending plans 6 months forward from June regional Federal Reserve Bank surveys plunged in June undoubtedly due to trade policy uncertainty. We had previously noted the surprising strength in May given the breakdown in US/China trade negotiations and the threat of Mexican import tariffs. Core capital goods orders from the May durable goods released this week marginally beat expectations and are stabilizing at a tepid growth rate. Core orders lag our spending index by 3 months underscoring how crucial it is to at least reach a detente in the negotiations with China. Keep in mind equipment is the weakest part of the capital spending story, they didn’t benefit from TCJA and are heavily influenced by the energy sector. More to follow on this topic…
Barry C. Knapp
Managing Partner
Ironsides Macroeconomics LLC
908-821-7584
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