Capital goods orders widely miss expectation, coming in at +0.3%, on a consensus of +2.8%, with the previous -1.2% drop revised to just -0.1%. Durable goods ex transportation came in at -3.8%, on expectations of 0.5% (previous -0.9% revised to 0.2%). And the kicker - non-defense capital goods ex. aircraft came in at -8.0% M/M versus expectations of 0.4% (with the previous print of 0.2% revised far higher to 3.6%). The 10 Year has hit 2.439% on the news. Pretty much game over for the reflation scenario. Check to you Bernanke - the only option left is the nuclear one.

Some highlights from the release:

Computers and electronic products, down following four consecutive monthly increases, had the largest decrease, $0.5 billion or 0.4 percent to $121.1 billion.

Inventories continue to grow:

Inventories of manufactured durable goods in July, up seven consecutive months, increased $1.8 billion or 0.6 percent to $311.2 billion. This followed a 1.3 percent June increase.

Machinery, up five consecutive months, had the largest increase, $0.9 billion or 1.9 percent to $51.4 billion.

Capital goods:

Nondefense new orders for capital goods in July decreased $1.8 billion or 2.8 percent to $64.1 billion. Shipments increased $0.9 billion or 1.4 percent to $64.7 billion. Unfilled orders decreased $0.6 billion or 0.1 percent to $487.2 billion. Inventories increased $1.0 billion or 0.8 percent to $129.8 billion.

Full release.

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