Stocks and exchange-traded funds (ETFs) are on the rise this morning after an upbeat durable goods report has inspired investors in early trading. Now the question is, will it sustain through the day?
The April Durable Goods Report was a positive one. New factory orders for durable goods in April surged 2.9%, which exceeded expectations of 1.5%, following a revised no change from the month before. The jump in the headline number was in large part because of the transportation component. Year-on-year, overall new orders for durable goods were up a healthy 18.9% in April, compared to 17.3% in March. [Railroads are Moving the Transportation ETF.]
- iShares Dow Jones Transportation Average (NYSEArca: IYT)
Following Tuesday’s late rally, the upbeat durable goods report inspired investors to keep buying as stocks continue to rise early Wednesday. A change in focus helped the market rally late Tuesday and into trading today as investors turn their attention away from European debt woes that have dominated financial news of late, choosing to instead concentrate on domestic news and the durable goods report, which provided further evidence that the U. S. economy is improving.
Gold futures have bounced back above $1,200 an ounce, likely in response to continued European economic struggles and increased tension on the Korean peninsula. However, analysts describe the buying trend as a continuation of recent worries as investors seek safety in the metal, rather than any new evidence creating or contributing to the current struggles in the global economic environment. [Gold ETFs Keep Their Calm in Crisis.]
- SPDR Gold Shares (NYSEArca: GLD)
Europe’s fiscal crisis has many economists wondering aloud if the U. S. recovery will encounter a slower road to recovery. Months after most analysts predicted the recession had passed, lingering worries and wounded European allies could possibly hamper demand for U. S. exports, posing an additional threat to domestic recovery. The Organization for Economic Cooperation and Development, at least, has boosted its growth forecasts for the global economy this year. Growth will come from emerging economies such as China, however, and not from developed markets. Growth is forecast to be 2.7% this year, up from the 1.9% predicted last year. [Winners and Losers in the Crisis.]
- SPDRs (NYSEArca: SPY)
Aaron Hurst contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.