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Durable rise in March, but job market remains weak

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Durable goods orders in March rose a stronger than expected 2% in March as demand for defense aircraft boosted orders. The 2% jump in March orders were well above economists forecast for a decline of 0.6%.

Excluding defense, durable goods orders rose 1.3%. Shipments of durable goods also were on the rise in March as products shipped rose 1%. All sectors reported gains in orders except for autos, civilian aircraft and metals. Core capital goods (excluding civilian aircraft and defense goods) rose an impressive 3.2% in March.

While this morning's report of March durable goods was an upside surprise to economists, the Labor Department's report that jobless claims rose by 8,000 to 455,000 for the week ended April 19, was much weaker than economist's forecast of 425,000. The 455,000 is the highest weekly total in more than a year and has the four-week average rising by 13,250 and well above the 400,000 level at 455,000.

Continuing claims rose by 42,000 to 3.589 million.

While this morning's durable goods orders were an upside surprise, the markets response has been more negative as if focusing on the jobless claims, as without jobs, the trickle down impact most likely impacts demand for goods down the road.

S&P futures (sp03m) currently trade down 6.2 points at 911.30, NASDAQ futures (nd03m) are falling 10.5 points at 1,103, while Dow futures (dj03m) have improved from their lows, but still trade down 51 points at 8,440.

Fair value for the S&P 500 today is $-0.62. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.57 and set for program buying at $-1.78.

Treasuries are finding buying this morning across the major maturities with YIELDS lower. The shorter-dated 5-year June futures contract (fv03m) is gaining 14/32 at $113'075, the 10- year June futures (ty03m) is higher by 17/32 at $114'160, while the longer-dated 30-year futures contract (us03m) is up nearly a full point, rising 29/32 at $113'010. The benchmark 10-year YIELD ($TNX.X) is falling 6.2 basis points at 3.933%.

Jeff Bailey

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