Interesting chart from Mike Panzner regarding durable goods and the SPX. Note that Real spending on nondurable goods was flat in August.
Before getting overly excited about this, I would want more info on three distinct questions:
1) Does the correlation go back beyond 1998? Is this merely a recent phenomena, or does it have a deep and broad history?
2) A fall off in Durable Goods would make sense as an indicator of both concurrent and future economic slowing, profit cooling, and equity price retracement. However, is this merely a decade of coincidental correlation, or is there a true causative factor at work?
3) There seems to be a year lag from September 2001 to 2002, from when Durable Goods orders picked up to when the market started moving higher. Is this historically typical? Has the same lag occurred in the past with Durable Goods falling (as they have since September 2006)?
It does seem to be an intriguing parallel . . .
Update: Several emailers and commenters have directed me to the Dallas Fed's collection of charts, especially this one:
Here's another view: The long term relationship between Durable Goods ex-Transportation and the broader stock market has been ambiguous.
Significant divergences between the two can be observed in 1984, 1989, 1995 and 1997 for example.