Scenario × Asset Analysis

What Happens to Baa-10Y Treasury Spread When Durable Goods Orders Plummet?

What happens when durable goods orders plummet? Capex signal, manufacturing weakness, and investment cycle implications.

Baa-10Y Treasury Spread

1.72%

as of Apr 13, 2026

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Trigger: Durable Goods Orders

315,879

Condition: declines 10%+ month-over-month

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How Baa-10Y Treasury Spread Responds

When Durable Goods Orders Plummet, Baa-10Y Treasury Spread typically responds to the changing macro environment. Moody's Baa minus 10Y Treasury, a wider measure of corporate credit risk. This scenario is particularly relevant for credit & financial stress because changes in Durable Goods Orders directly influence the macro environment for Baa-10Y Treasury Spread. Investors should monitor both the trigger condition and Baa-10Y Treasury Spread's response to position accordingly.

Scenario Background

Durable goods orders measure new orders placed with US manufacturers for long-lived items (machinery, transportation equipment, computers, appliances). Core capital goods orders (ex-defense, ex-aircraft) are the cleanest capex signal, while headline orders include volatile aircraft categories that can swing prints significantly.

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Historical Context

Durable goods orders have seen sharp declines during every recession: 2008-2009 (peak -40% YoY), 2020 (-60% in April), and 2001 (peak -25%). Post-COVID orders have been elevated due to pent-up demand, supply chain catch-up, and AI-related capex (semiconductors, data center equipment). Core capital goods orders have been particularly resilient in 2023-2024.