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Fundamentals today reveal the shocking state of minds consumers are in as durable goods readings came out surprisingly low indicating that consumers and businesses lost their trust in the US economy.
Such declines alerts all analysts and economists as the expected or let's say normal reaction is for the Fed's to consider cutting rates as fewer investments will indeed decrease spending in the economy hence slows down or lowers growth despite booming exports.Some of the details of the data indicate that the durables report is notoriously volatile and it wouldn't be likely that the Feds will overreact to such news. However with the weakness of capital spending and the expectations of a cover up of the growth losses caused by the housing slumps which unfortunately didn’t happen, strategies will have to be changed to overcome the problem.Orders for computers and other electronics excluding semiconductors dropped 8.4%, shipments which feed directly into the gross domestic product fell 1.2%. With demand for high technology goods weakening, orders for US made durable goods fell for the third straight month in October, falling 0.4%October's sales of previously owned homes plunged 1.2% to 4.97 million units from downwardly revised previous of 5.03 million units as the previously given was of 5.04 million, sales came lower than median estimates of 5.00 million marking the lowest since 1999 though more homes came on the marketThe fundamentals in the market don’t indicate a further decline in sales as analysts expect that low mortgage rates and job growth should keep sales from falling. However if sales continue to decline, that would be a major concern as it would raise the risk of an economic recession. Sales were lowest in the west region as sales plunged 4.4%. Viewing all the data above, we could only conclude that the final call will be for the Feds and their decision upon the upcoming December rate decision in which it is likely that we witness a further cut in rates but tomorrow is a new a day and a new day is sure full of surprises.