Transportation in focus
On Thursday I discovered an interesting Article in the Wall Street Journal: “Transport Stocks Blaze a Path”
The author mentions some interesting thoughts on those numbers. He says, that they are actually an indicator for the producing industry. To Quote WSJ: “…transporters take, what industrials make.”
Only if consumers demand products the industry can produce them. Once produced they have then to be transported to their selling destination. If transportation is down, then there is not much production.
“Railcar loading” is one of Warren Buffets favourite indicators. You can find the weekly report here.
“Transports leading industrials suggests the recovery in the economy and markets is real.” (WSJ)
WSJ says, that the transportation numbers are getting better in the last month, but that we are still down 14% year over year. And despite the rally we had in the markets, I think that we now should have a closer look on real economic data like this or production numbers. Many companies have downsized a lot, but they don’t sell as much as years before. If they can´t sell more this rally will be over. Economic hard facts could be in focus again soon.
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