Most of the big indexes were down yesterday, but not Transports.
The Dow Jones Transportation Average ($DJT) rose more than 1 percent. Digging deeper with TradeStation’s ever-useful RadarScreen®, we find that three of the six best-performing sub-indexes were related to transportation:
- DJ US Airlines ($DJUSAR) +1.76%
- DJ Trucking ($DJUSTK) +1.5%
- DJ Railroads ($DJUSRR) +1.32%
It appears that a few potentially positive factors are at play. For airlines, it’s all about oil. Investors have punished the group this month because it hasn’t been able to hikes fares as fuel costs rise. But oil’s down for three straight sessions as crude inventories grow. Further weakness in energy costs could bolster airline profits.
Railroads and truckers, on the other hand, have enjoyed pricing power. Not only have big firms like United Parcel (UPS) and Union Pacific (UNP) reported strong results. Several big customers of transport services like TJX (TJX) and Deere (DE) complained about higher shipping costs in their quarterly reports. Federal Reserve policymakers noticed the same thing at their last meeting, according to their recent minutes.
In conclusion, this isn’t a recommendation and everyone needs to do their own homework, but some things may be shaping up positively for transports.