The surprising jump in December durable goods orders is reshaping the debate in some corners of Wall Street on whether the Fed will cuts its target Fed funds rate by a quarter or a half point tomorrow.

The stock market has been pricing in a half point cut. But the big move up in durable goods has traders talking about the possibility that the Fed sees a stronger economy than expected as it starts its two day meeting today and maybe will hold back some of its fire power.

Orders for manufactured goods rose in December by the biggest amount in five months. The 5.2 percent increase was well above the expected 1.6 percent and a real surprise because of other weak signs for manufacturing last month. The ISM manufacturing index had fallen to 47.7 in December, its weakest level in more than four years.

The Commerce Department durable goods report showed the strength came from a big increase in commercial aircraft orders. Those orders jumped 11.3 percent. Non defense capital goods rose by 4.4 percent, but autos and auto parts declined by 2.3 percent.

Of course one data point does not a Fed decision make.

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