Preview: May Factory Orders

May Factory Orders are expected to rise 0.6% following a 0.8% increase in April and a 1.9% decline in March

Factory Orders Ex-Transports are expected to rise 0.2% following a 0.1% increase in April May Shipments are expected to fall 1.1% following a 0.3% decline in April and a 1.8% decline in March

Factory Inventories are expected to decline 0.8%, while the I/S ratio is expected to be unchanged at 1.45

The larger than expected jump in May headline Durables goods, as well as ex-auto orders have paved the way for the second consecutive monthly increase for headline Factory Orders in May, while the ex-autos component is likely to report a more modest increase in May relative to the headline. On the other side of the fence, continued declines in factory shipments are likely to show declines similar to the May Durable goods report in which shipments fell 2.1%. Factory Inventories are also expected to reveal further retrenchment over the month as the outlook for inventories remains considerably bleak.