Transport stocks were completely rebuilt the recession and bear market. But this may not matter until the broader market is hitting new highs as well.
NEW YORK (CNNMoney) - pigeon series favorite son of children's books "like things that go on." (Mo Willems is a genius). Similarly, the market likes that go too.
The Dow Jones Transportation average (TDI), a collection of 20 truck drivers, shippers, railway and airline companies, reached a record level last week at the gathering in the vast market and was commercial new a Wednesday. This is true. A record. Not a single 52-week high.
It is this cause for celebration? After all, the transport stocks are often considered an advanced strong economic growth indicator.
If the Rails, skies, seas and the roads are crowded with trains, planes, boats and trucks all kinds of things, that must mean the companies produce goods that they think that consumers really want to buy shipping.
However, in looking at the components of the index showed that the resistance is not necessarily linked to optimism on the economy. There may be more to do with the commodity boom.
Companies in the means of transport Dow Jones really well this year are mainly railway companies and truck drivers, those benefiting more than carrying coal, corn, oil and other products whose prices have emerged.
J.B. Hunt Transport Services (JBHT) and the system of Landstar (LSTR) have increased by more than 15% of trucking companies this year while CSX (CSX, Fortune 500) and Norfolk Southern (NSC, Fortune 500) have each earned more than 20% at the beginning of the year.
But it is a different story when you look at other transport stocks which have more direct links with unstable consumers and who are affected by the increase in fuel prices.
There are five airlines in the Dow Jones Transportation average. All five stocks are declining, with AMR (AMR, Fortune 500) and Delta (DAL, Fortune 500) each after having plunged about 30%.
Shipping giant UPS (UPS, Fortune 500) and FedEx (FDX, Fortune 500) have lagged the market this year. They are only up to about 4%. Shippers of goods more small C.H. Robinson Worldwide (CHRW, Fortune 500) and Expeditors International (United States) are also leakage of the wider market gains.
This is worrisome. If all the transports were a year more, he would probably be a more concrete sign that the general economy is actually faster still. Instead, resistance in transportation is just further evidence of the commodity bull run.
Fortunately, some other transport are slowly gaining strength.
FedEx has been suggested that his fortune to improve. That was good augurs for the rest of the Group and the whole of the market and the economy. FedEx has delivered solid guidance for its fiscal year, a few weeks ago.
But even this good news must be taken with a grain of salt. FedEx cited specifically resumed moderate in the global economy, as opposed to the United States only, for its healthy quarterly results and guidance.
The request is clearly stronger abroad that U.S. FedEx reported that the volume of U.S. packages fell 1% in its most recent quarter, which ended in may from a year ago. But priority international shipping volume increased by 6% from the year last while international interior volume was up to 15%.
This is not bad news, but this means that FedEx and other transportation companies can continue to benefit from the fact that they do more business in the country fast-growing economies in Asia, South America and other emerging markets.
Market specialists speak much how you need to see transportation hit new heights with the Dow Jones industrial average (INDU) to get really excited on the whole of the market. But the 30 Dow is still more than 10% below its high point of the page.
"Transportation is a new record, which is good." "But the Dow industrial are not even close to their peak in 2007," said John Kosar, Director of research with Asbury research at the Chicago. "" Therefore, transport direct or they understood prior to ".
"Something is mispriced and the rally in transportation appears to be suspicious," said Kosar. "Look at the fundamentals." The housing market is horrible. Unemployment is still high. »
So if it is generally a good sign for the US economy that transport stocks occur new highs, which may not be the case this time.
The opinions expressed in this commentary are only those of Paul R. Monica. Other Time Warner, the parent of CNNMoney and Abbott Laboratories, Monica has no positions in individual stocks.
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