Displaying items by tag: transportation

Monday, 22 July 2019 10:05

The Dow’s Ugly Outlook

(New York)

One of the oldest form of analysis of the Dow is sending a pretty grave signal at the moment. The Dow Theory, which has been around for more than a century, contend that if the Dow Jones Industrial Average or the Dow Jones Transportation Average reaches a new high, the other must follow quickly in order to confirm a bullish outlook. Well, despite the core index’s gain, the Transportation Average has been lagging badly, sliding 3.59% in a single day last week.

FINSUM: Okay a couple thoughts here. The first is that the structure of the economy is different now, such that the relationship between growth and Transportation is not the same as it has been over the last century. Outside that though, logistics tends to expand at multiples of underlying growth, so this still feels worrisome.

Published in Eq: Large Cap
Tuesday, 25 June 2019 09:10

Stocks Sending a Big Warning Sign

(New York)

Yes, the market is at or near all-time highs. Yes, the Fed is dovish, which is mildly bullish for markets (or very bullish if the economy stays in decent shape). However, equities are sending some strong warning signals too. In particular, two sectors which often act as bellwethers are showing that the market may be headed for a decline. Both small caps and transportation stocks have been struggling, a development usually associated with a market headed south. The sectors have declined at a rapid pace, and relative to the S&P 500 as a whole, are at their weakest point since 2009.

FINSUM: This is a signal similar in nature to the yield curve inversion. Is it material or just an aberration? Anyone’s guess.

Published in Eq: Small Caps

Contact Us



Subscribe to our daily newsletter

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…