Merkel Tries to Garner Support in Bundestag Before EU Summit

Durable goods orders fell in September after the drop in orders from aircraft manufacturers neutralized the successes of such companies as Caterpillar Inc (CAT), which show increasing production thanks to their expansions to overseas markets.
By: DT Trading Limited Analytical Department
 
Oct. 26, 2011 - PRLog -- Durable goods orders might have fallen in September after the drop in orders from aircraft manufacturers neutralized the successes of such companies as Caterpillar Inc (CAT), which show increasing production thanks to their expansions to overseas markets. According to the estimates of 79 economists polled by Bloomberg, orders for equipment with three years of service life or more fell 1% after decreasing 0.1% in August. According to the same poll, orders for goods excluding aircraft (so-called business investment orders) rose 0.4%. The growth in developing countries’ economies and the 14% drop in the dollar’s value since June 2010 is accelerating American exports to record-high levels. It is also being helped by companies such as Caterpillar to defend itself from a prolonged drop in US housing construction, a major deterrent to the emerging economic recovery. The second report coming out today from the Department of Commerce might show that new homes sales did not significantly fluctuate from the six-month low. According to analysts’ predictions on the government sales report, the number of new homes purchased in September should increase to 300,000 units in annual terms, versus 295,000 in August, the weakest figure since February of this year.

The company Boeing (BA), the largest airplane manufacturer in the US, announced that it received orders for 59 aircraft in September, compared with 127 the previous month. The drop will likely be reflected in data on durable goods. DT Trading’s analytical department points out, however, that data from the companies themselves may not always coincide with government statistics from month to month. Other indicators showed that production, which accounts for about 12% of the US economy, continues to grow. The Institute for Supply Management’s Business Activity Index rose to 51.6 in September, up from 50.6 in August. Anything above 50 indicates a decisive upward dynamic. DT Trading analysts recall that, according to the Fed’s most recent publication of its “Beige Book,” industrial production rose in September on the back of growing demand for automobiles and computers.

German leaders seem poised to support the plan to increase the European Financial Stability Fund at their next extraordinary meeting. Meanwhile, the threat of the so-called “Greek contagion” spreading to Italy has prompted European leaders to also put the screws on Prime Minister Silvio Berlusconi’s government. Later today at the summit in Brussels, he is expected to bring specific proposals for his government to reform the country’s financial system. Chancellor Merkel is currently in the Bundestag, addressing legislations on the approval of a packet of measures to increase the 440 billion Euro ($612 billion) EFSF; this will be the first reading before the packet goes on for a final vote.

DT Trading Limited Analytical Department

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