The Commerce Department disclosed that factory orders recorded 2.7 percent increase in October. This is better than the Street expectations of 2.5 percent growth following a slender gain of 0.3 percent in September to wrap up the third quarter. The data suggested that it was the fourth straight monthly gain and biggest streak of straight gains after the year 2009.
Wells Fargo & Co (NYSE:WFC) thinks that economic indicators from the manufacturing segment were coming in better than expected. This was probably due to lower expectations. For instance, capital goods orders are running a bit hotter. The brokerage pointed out that core orders increased in four out of the last five months. Currently, it was expanding at 3.8 percent.
Wells Fargo thinks that headwinds are fading pointing out that there are indications that logjam in respect of low commodity prices, strong greenback and soft global growth are starting to break.
In a research note, the firm viewed, “Commodity prices have turned higher, particularly oil prices which have surged in the wake of the late November OPEC decision to scale back production. As of this writing, both WTI and Brent crude prices are north of $50/barrel, a roughly 20 percent increase since November lows.”
Economists cited the Organization for Economic Cooperation and Development (OECD) revising its GDP growth estimates higher for the years 2017 and 2018 to support the view that the international economy continued to firm up. However, the dollar has not been kind enough.
SPDR S&P 500 ETF Trust (NYSEARCA:SPY) gained 0.19 percent to $221.42 at time of writing this.