Overview
Morgan Stanley reported that its Capital Goods Momentum Index (CAPMI) climbed five points month‑over‑month, reaching a level of 58 in July. A reading above the neutral threshold of 50 signals accelerating growth in the capital‑goods sector.
Index Performance
The overall CAPMI rose from 53 to 58, a five‑point increase. Regionally, the United States sub‑index also rose five points, the Europe sub‑index added five points, and the Asia‑Pacific sub‑index gained three points. The Global sub‑index, which aggregates all regions, recorded the largest advance, increasing seven points during the month.
Sector Drivers
In the United States, the gains were led by the General Industrial, Auto, Oil & Gas, and HVAC sectors, while land freight showed minor weakness. European data reflected strength in Germany and in the construction sector. In the Asia‑Pacific region, performance was weaker, primarily due to soft readings from China and Japan; however, India showed an improvement that helped offset some of the regional drag. The Global sub‑index benefited from broader improvements in General Industrial and Aerospace sectors.
Index Composition
The CAPMI measures month‑over‑month momentum across 48 global macro and industry indicators. Its exposure breakdown is 42% North America, 19% Europe, 19% Asia‑Pacific, and 21% Global data. The index tracks major end‑markets including Aerospace, Automotive, Construction, Oil & Gas, HVAC, Power, and Technology.
Interpretation
A July reading of 58 places the CAPMI well above the 50‑point neutral line, indicating that capital‑goods activity accelerated across most regions and sectors tracked. The partial weakness in the Asia‑Pacific reading was attributed to a weak April result that dropped out of the moving‑average calculation, suggesting that the recent improvement is more robust than the prior month’s data.