Initial Claims, Durable Goods & New Home Sales

In our top story tonight, the leader of al-Qaida in Iraq, Abu Musab al-Zarqawi, is STILL dead and someone else has taken his place.

Initial Jobless Claims -1K @ 313K

Inside the number: Number of people collecting benefits -9K to 2.5M.

July Durable Goods Orders -2.4% Full Report

Inside the number: ex transportation durable goods orders +0.5%, 10th increase in 12 months, YTD durable goods orders +9.3%. Nondefense nonaircraft capital goods +1.5%, shipments of core capital equipment +1.3%.

Beneath the headlines and excluding autos, the report was strong and showed robust orders for core capital goods.

July New Home Sales -4.3% @ 1.07M; Inventory +1.1% @ 568K Full Report

Inside the number: Sales are down 21.6% in the last year, the largest drop since 1994. Inventories are up 22% in the last year, an 11 year high.

Consumer spending will take a big hit as home equity withdrawals dry up. Combined with yesterdays plunging existing home sales, this paints a very grim picture for the houring sector and global economy.

The threat is that prices will fall and possibly sharply, if that happens, spending could moderate more than expected and shock waves would be felt in countries dependent on US consumer spending such as Japan and China.

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