Wednesday, June 01, 2011

Too Late To Bet On Freight

I've long suspected that transportation data generates good leading indicators for the direction of the overall economy.  If the housing market's double-dip is insufficient proof that the U.S. economy is slowing, the reversal of freight volume growth should be convincing.  The slowdown is hitting several transportation modes and mirrors new data from the Institute for Supply Management confirming a May slowdown in manufacturing growth.  There's less to transport if less stuff is being made. 

If freight traffic is peaking, then similar peaks in carrier earnings and transportation sector stock prices should follow shortly.  Watch out below.  Those of us with large enough nets can catch falling bargains.