Way up and better than expected, but looks like it was all a large aircraft order and some cars. Another good headline April release also likely to reverse in May:

Durable Goods Orders

Highlights
Indications on the factory sector have been mixed as is April’s durable goods report. The headline came in at a stronger-than-expected gain of 3.4 percent with March revised higher to a gain of 1.9 percent. Vehicles orders gave an important boost to April, up 2.9 percent as did the always volatile commercial aircraft component which swung 65 percent higher. But the ex-transportation reading, which excludes vehicles and commercial aircraft, rose a more modest and as-expected 0.4 percent.

A negative in the report is a sizable 0.8 percent decline in core capital goods orders which ominously is the third straight decline for this reading and the fifth out of the last six reports. Year-on-year, orders are noticeably in the negative column at minus 5.0 percent. These readings point squarely to stubborn weakness in business investment and uncertainty in the general business outlook.

There are, however, solid points of strength in the report including 0.6 percent gains for both total shipments and total unfilled orders. The gain for unfilled orders is the largest since July 2014. Another plus is a 0.2 percent decline in inventories which pulls down the inventory-to-shipments ratio to a leaner 1.65 from 1.67.

Vehicle strength is an important foundation for the factory sector, one tied to domestic consumer demand and a strength that highlights this otherwise mixed report.

After moving up some in April, backing down in May, and negative all along:

Another upbeat April housing number likely to reverse in May, the way all the other releases have so far:

Pending Home Sales Index

Highlights
News from the housing sector has been improving and very rapidly. First Tuesday’s new home sales report which absolutely surged and now a similar surge in the pending home sales index, up 5.1 percent in April for a third straight gain and pointing to greater acceleration for final sales of existing homes. The West, where existing home sales have been lagging, shot up a monthly 11.4 percent in today’s report with the South showing additional strength, up 5.1 percent. This week’s data, coming right at the beginning of the Spring season, have turned around the housing outlook, from modest growth to sharp growth in what is the latest indication of household strength.

As previously discussed, the logic behind allowing people with existing conditions to buy insurance at the same rate as everyone else is highly suspect:

Not a word from the analysts when they were down 6% last week.

But when up 5% this week expect lots of mentions…

MBA Mortgage Applications

Highlights
Purchase applications for home mortgages revived in the May 20 week, increasing by 5 percent from the prior week, while refinancing activity managed to post a gain of 0.4 percent despite slightly higher rates. The average 30-year mortgage for conforming loans ($417,000 or less) was up 3 basis points to 3.85 percent. Purchase applications were 17 percent higher than they were a year ago, an impressive gain that points to continuing strength of a very strong housing market, as seen best in yesterday’s new home sales report for April, showing total year-on-year sales up a remarkable 23.8 percent.

A bit higher than expected now been going sideways for almost a year:

Existing Home Sales

Euro Area current account surplus continues to zig zag it’s way higher:

Euro Area Current Account

Eurozone current account surplus came in at €32.3 billion in March of 2016 compared to an upwardly revised €11.2 billion surplus in the previous month. The surpluses in balances of goods (to €36.1 billion from €25.2 billion in February) and services (to €4.5 billion from €3.2 billion) widened while the one in primary income (to €6.5 billion from €6.8 billion) narrowed slightly. In addition, the secondary income deficit decreased (to €-14.8 billion from €-24 billion).

This is ‘borrowing to spend’ that’s gone away:

Back into contraction after a blip up in April:

Philadelphia Fed Business Outlook Survey

Highlights
After popping higher in March the Philly Fed index has been dead flat since, at minus 1.6 in April and now minus 1.8 for May to point to slight contraction in the Mid-Atlantic manufacturing sector.

After jumping to 15.7 in March, new orders posted a zero in April followed now by minus 1.9 in May. And contraction in unfilled orders is deepening, at minus 8.8 vs minus 6.3 and minus 1.9 in the prior two months. Employment remains in contraction at minus 3.3 with the workweek also in contraction and at a steep minus 15.1.

Shipments are down as are inventories while confidence in the 6-month outlook is eroding, though only moderately. And price data are positive and are showing some welcome pressure, at 15.7 for inputs for a second month of solid improvement and at 14.8 for selling prices which is the best reading since October 2014.

But the bulk of this report is a disappointment and follows even greater weakness in Monday’s Empire State report. The factory sector continues to stumble along, not yet showing much benefit from the falling dollar, which boosts exports, nor the rebound in oil prices which should eventually boost energy spending.

Up this month but it’s volatile month to month so best to look at the 3 month average which went more negative: