Excluding commercial aircraft, which declined 54.5% in January after a 105.6% jump in December and Transportation, Factory Orders increased by 1.2% or double analysts' forecast of a 0.6% gain.
What Does This Mean to Me?
The U.S. economy continues to show moderate gains from the pandemic. However, investors are in a state of panic about anything that may indicate the Federal Reserve will raise the discount rates past their 5.25% – 5.5% target. Unfortunately, the good news of economic growth is bad news as it may indicate that inflation is not settling down fast enough for Jerome Powell and his Federal Open Market Committee (FOMC). Investors still fear the Federal Reserve will drive the U.S. economy into a recession despite the seemingly controlled slowing of inflation with rising interest rates without much collateral economic damage.
Referring to technical indicators, it is positive that the S&P 500 rallied in January above its previous high reached on December 1, and the February pullback did not drop the index below the previous low reached on December 30. Also, the index remains above its 200-Day Moving Average (DMA) and within 0.5% of both its 20 DMA and 50 DMA. The upward trend remains in tack.
NASDAQ also remains in a positive trend with the same technical indicators as the S&P 500.