Walt & Jon Overreact in February: Business is Noticeably Better Than Expected

摘要

In our February article entitled "Achtung: This 2"x 4" to the Head Should Get Your Attention," we expressed concern about slowing U.S. end-market demand and the imbalance between electronic equipment and component orders. As a result we felt that N. America would see a sharp downward "correction" this Spring. Guess what? It looks like we were wrong. Based upon recent DOC data, orders for all U.S. electronic equipment categories (except military) improved in February (Chart 1) and the gap between electronic equipment and component order growth (Chart 2) narrowed. And ... finished goods inventories remained "controlled" as the ratio of equipment inventories to orders continued to decline (Chart 3).