This chart from a Goldman U.S. steel report, where they recommended buying U.S. Steel (X) and SLD ahead of earnings, shows how U.S. capital goods orders have bottomed, and even just begun to bounce.
If the previous recession is any guide, it might take a a few years before orders really surge. But beneficiaries of such orders will probably react ahead of the actual data, so this tiny bounce will be worth watching for sustainability, since if it holds then history shows how much these orders can surge:
As a side note, Steel Dynamics beat expectations yesterday, and shares appear to be up on the news, with the CEO saying that “A gradually improving economy with moderate strengthening of steel demand is resulting in firmer order backlogs for our mills, which also implies continued better conditions for the scrap markets.”
(Via Goldman, United States: Steel, Sal Tharani, 19 April 2010)
Business Insider Emails & Alerts
Site highlights each day to your inbox.