Author: Gus Lubin and Vincent Fernando, CFA

Durable goods orders came in at -1.3%, far below the Reuters-based consensus estimate of a 0.3% rise.

But the good news was a +1.1% revision of February data.

Read the government report here >

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New orders for manufactured durable goods in March decreased $2.2 billion or 1.3 percent to $176.7 billion, the U.S. Census Bureau announced today. This decrease followed three consecutive monthly increases, including a 1.1 percent February increase. Excluding transportation, new orders increased 2.8 percent. Excluding defense, new orders decreased 1.2 percent.

Transportation equipment, down two consecutive months, had the largest decrease, $5.9 billion or 12.9 percent to $40.2 billion. This was due to nondefense aircraft and parts which decreased $6.5 billion.

Shipments

Shipments of manufactured durable goods in March, up following two consecutive monthly decreases, increased $2.2 billion or 1.2 percent to $182.2 billion. This followed a 0.5 percent February decrease.

Machinery, up two consecutive months, had the largest increase, $1.0 billion or 4.3 percent to $24.0 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in March, down following two consecutive monthly increases, decreased $2.3 billion or 0.3 percent to $719.8 billion. This followed a 0.4 percent February increase.

Transportation equipment, also down following two consecutive monthly increases, had the largest decrease, $4.6 billion or 1.1 percent to $408.6 billion.

Inventories

Inventories of manufactured durable goods in March, up three consecutive months, increased $0.5 billion or 0.2 percent to $304.7 billion. This followed a 0.5 percent February increase. Primary metals, up five consecutive months, had the largest increase, $0.5 billion or 1.8 percent to $27.1 billion.

Capital Goods

Nondefense new orders for capital goods in March decreased $4.6 billion or 7.5 percent to $56.1 billion. Shipments increased $1.4 billion or 2.4 percent to $59.0 billion. Unfilled orders decreased $2.9 billion or 0.7 percent to $409.1 billion. Inventories decreased $0.5 billion or 0.4 percent to $132.1 billion.

Defense new orders for capital goods in March decreased $0.4 billion or 4.0 percent to $10.0 billion. Shipments increased $0.1 billion or 0.7 percent to $10.9 billion. Unfilled orders decreased $0.9 billion or 0.6 percent to $131.3 billion. Inventories decreased $0.1 billion or 0.6 percent to $20.6 billion.

Revised February Data

Revised seasonally adjusted February figures for all manufacturing industries were: new orders, $384.3 billion (revised from $383.5 billion); shipments, $385.4 billion (revised from $384.9 billion); unfilled orders, $722.0 billion (revised from $722.2 billion); and total inventories, $499.7 billion (revised from $498.3 billion).

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BACKGROUND: First there was the shale gas revolution. Thanks to technological advances in horizontal drilling, the U.S. natural gas industry has undergone a revolution whereby new techniques are expected to deliver vast amounts of cheap natural gas from U.S. underground shale-rock formations.

There was a time when this gas was once considered unfeasible at reasonable cost, and companies had planned Liquefied Natural Gas (LNG) terminals in order to accommodate U.S. natural gas imports.

Yet now major energy companies such as Exxon believe in shale gas and America faces a domestic supply gut of natural gas. LNG terminals are now discussed in terms of how much they can export.

EVENT: Now shale gas technology has set off America’s shale OIL revolution. Where there’s natural gas in shale, there tends to be oil as well. Previously, even with the new drilling technology that made shale gas cheap, producers thought that they would have to leave shale oil behind since it was too expensive to tap.

Not anymore. Now companies such as EOG Resources (EOG) believe they have the technology to not only produce cheap natural gas from U.S. shale, but to produce oil at a competitive cost as well.

IMPACT:  America has potential oil shale reserves well over five times the oil reserves of Saudi Arabia and now companies have begun to tap them at a competitive cost, see how below:

How The Shale Gas Revolution Just Became America’s New Domestic Oil Revolution >

Disclaimer: The author Vincent Fernando does not own shares in EOG. This piece doesn’t say anything as to whether EOG or any shale-related company is or is not a good value at its current price. Companies or individuals the author works with may have positions in EOG or shale-related companies. The author Vincent Fernando owns shares of Chesapeake Energy (CHK), a shale gas-related company. Everyone must do their own complete due diligence.

America is about to make huge progress using shale gas tech to tap vast amounts of shale oil.

Source: EOG

Horizontal shale oil has had PLENTY of doubters and technical challenges.

Source: EOG

It has a bad reputation… Mr Burns tried to steal oil with the BURNS SLANT-DRILLING Co.

Saddam said Kuwait was using slant drilling to steal Iraqi oil in 1990

This is how horizontal drilling works. It substantially increases the potential contact area between a well and resource-containing rock.

Source: Horizontal Drilling

Horizontal wells also offer more targeted access. This allows them to tap reserves under places we might not want to disturb, such as a town or forest.

Source: Horizontal Drilling

If you really don’t get it, here’s a video.

Source: EOG

The great news is that oil particles are small enough to be collected by the same technology used to grab natural gas from shale.

Source: EOG

Thus horizontal drilling can target the irregular pockets of oil found in shale.

Source: EOG

Importantly, horizontal technology can produce high quality oil profitably since it scales off of the same infrastructure used to get gas. It could be more competitive than oil sands or deep water drilling.

Source: EOG

EOG alone could have massive amounts of potential new economically-feasible oil thanks to new technology.

Source: EOG

For example, ‘Eagle Ford’ was not seen as a reservoir rock, until now.

Source: EOG

EOG expects massive growth for both natural gas and oil… and this is just one company.

Source: EOG

The even better news is that America has almost 3/4 of the world’s known shale oil reserves.

Most of it is still too expensive to produce… but EOG’s efforts show how America can begin to scratch the surface of oil shale potential and cut its dependence on foreign oil producers, even Saudi Arabia.

Appalachia could be the big domestic winner for now.

Conclusion: Game changer. EOG is just an early example of what’s likely to come from other companies as well. Just wait.

Source: EOG

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In 2007, the emerging market consumer blew past the America’s to become the largest source of buying power globally.

Since then, they’ve extended their lead and the change is likely irreversible given higher growth rates possible from emerging markets and the impetus for America to correct past imbalances in savings and trade.

Moreover, within emerging markets China is the largest consumer story there is by far, and has tons of listed companies which traders have made a killing from over the last year.

Thing is, despite all the hype about China, many of us really don’t know many of the new consumer names. Even though as investors we’d be smart to have a clue. So we put this list together. Feel free to suggest even better names.

How Traders Are Making A Killing Off Of The New Chinese Consumer >

Note that many of these stocks have enjoyed enormous rallies and require substantial due diligence, thus everyone should do their own homework and bear in mind timing is pretty important.

The largest telecom subscriber base in the world — China Mobile

China Mobile is the world’s largest mobile phone operator, with over 500 million customers. It is also a state-owned company.

Ticker: CHL (US)

1-Yr Return: 11.731%

Youth culture — Metersbonwe

Metersbonwe is China’s leading casual-apparel company. It targets a young demographic with their slogan, “Be Different.”

Ticker: 002269.CH

1-Yr Return: 30.163%

Alcohol consumption — Kweichow Moutai

Kweichow Moutai is a state-owned company that specializes in the production and sale of China’s most popular liquor, moutai.

Ticker: 600519.CH

1-Yr Return: 42.911%

Retail focused in Beijing — Beijing Wangfujing

Wangfujing is a Beijing-based department store, named for the capital’s popular shopping street.

Ticker: 600859.CH

1-Yr Return: 63.738%

Booming education demand — New Oriental Education and Technology Group

New Oriental is the largest provider of private education in China, with a heavy focus on teaching English.

Ticker: EDU (US)

1-Yr Return: 66.705%

Women’s lingerie — Shanghai Bailian

Bailian is a vertically-integrated lingerie and swimwear company.

Ticker: 600631.CH

1-Yr Return: 67.566%

Food and beverages — Want Want

Want Want is a food manufacturer from Taiwan. It is the largest rices cakes and flavored drink producer in Taiwan and its products are popular on the mainland.

Ticker: WWNTY (US), 161 HK

1-Yr Return: 67.947%

Chinese noodle demand — Tingyi

Tingyi is China’s biggest maker of packaged food, mostly under the Master Kong brand.

Ticker: TCYMY (US), 322 HK

1-Yr Return: 111.197%

The infamous — Mengniu Dairy

Mengniu Dairy manufactures and distributes dairy products in China. The company was one of many to be indicted in the 2008 tainted milk scandal.

Ticker: 2319 HK

1-Yr Return: 127.654%

Rising healthcare needs — China Nepstar Chain Drugstore

China Nepstar Chain Drugstore is China’s largest retail drugstore chain.

Ticker: NPD (US)

1-Yr Return: 130.601%

The new rich — Lifestyle International Holdings

Hong Kong-based Lifestyle operates a series of high-end department stores, branded SOGO and Jiuguang.

Ticker: 1212 HK

1-Yr Return: 133.367%

China’s best known beer — Tsingtao

Tsingtao is a Chinese beer company that was founded by German immigrants in 1903. It claims about 15% of domestic market share, as well as global distribution.

Ticker: TSGTY (US), 600600 SS

1-Yr Return: 135.057%

The e-learning boom — China Cast Education Corporation

ChinaCast is an education company that operates two universities and a growing sector for e-learning.

Ticker: CAST (US)

1-Yr Return: 139.875%

Bold enough to fight against Nike — Li Ning

Li Ning is a sportswear company that competes with Nike. The company recently opened its first store in the U.S. It sponsors several famous athletes, including Shaquille O’Neal.

Ticker: LNNGF (US), 2331 HK

1-Yr Return: 140.697%

2.6 billion feet — Belle International

Belle is the leading women’s shoe retailer in China.

Ticker: 1880 HK

1-Yr Return: 143.338 %

Another infamous, but huge, name — Gome

Gome is one of the largest electrical appliance retailers in China. The company was recently delisted for several years following charges of stock manipulation, but it’s back.

Ticker: 493 HK

1-Yr Return: 158.921%

Chinese tourism — C-Trip International

C-Trip is a travel website. The company books over 2 million airline tickets monthly.

Ticker: CTRP (US)

1-Yr Return: 185.240%

Of course — Baidu.com

Baidu is the largest Chinese-language search engine. If Google leaves China, Baidu stands to win big.

Ticker: BIDU (US)

1-Yr Return: 229.511%

Retail concentrated in one of China’s wealthiest areas — Intime Department Store Group

Intime operates 16 large department stores, including 10 around the city of Hangzhou.

Ticker: 1833 HK

1-Yr Return: 248.288%

Don’t Miss…

15 Facts About China That Will Blow Your Mind>>

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