{"id":30305,"date":"2015-11-16T17:58:45","date_gmt":"2015-11-17T01:58:45","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=30305"},"modified":"2015-11-16T17:58:45","modified_gmt":"2015-11-17T01:58:45","slug":"the-bullish-economic-news-from-americas-truckers","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2015\/11\/16\/the-bullish-economic-news-from-americas-truckers\/","title":{"rendered":"The Bullish Economic News from America’s Truckers"},"content":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on August 29, 2015. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

The iShares Transportation Average (IYT) began to diverge notably from the S&P 500 (SPY) in March of this year. It took another five months for this divergence to resolve into a notable breakdown in the S&P 500. <\/p>\n


\n
\"The<\/a>
The iShares Transportation Average (IYT) appears to “predict” the breakdown in the S&P 500 with a 5-month leadtime<\/figcaption><\/figure>
\nSource: FreeStockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

The divergence caught the attention of many technicians but after month-after-month of no consequence, this predictor seemed to fail. The divergence even seemed to come to an end in July with IYT staging an impressive comeback. The transportation index registered a 4.1% gain and traded above its 50-day moving average (DMA). The S&P 500 gained 2.0% that month. I guess the light bulb really does shine brightest right before it goes out.<\/p>\n

Another divergence may be occurring WITHIN the transports. On Friday, August 28, 2015, Nightly Business Report<\/a> included a segment covering America’s biggest truck “beauty pageant” in Dallas, Texas where the news on the economy was very bullish. {snip}<\/p>\n


\n
\"Over<\/a>
Over the last two recessions, trucking tonnage has probably served more to CONFIRM rather than predict recessions and recoveries<\/figcaption><\/figure>
\nSource: US. Bureau of Transportation Statistics, Truck Tonnage [TRUCKD11], retrieved from FRED, Federal Reserve Bank of St. Louis<\/a>, August 28, 2015.<\/strong>
\n<\/center><\/p>\n

{snip}<\/p>\n

Trucking is undeniably critical to the American economy. NBR noted that nearly 3\/4 of all freight in the U.S. travels by truck at some point along the way. The American Trucking Associations (ATA) notes<\/a> that 69% of tonnage carried by all modes of domestic freight transportation goes by truck, with motor carriers collecting 80% of the total revenue earned by all transport modes.<\/p>\n

{snip}<\/p>\n

Trucking executives interviewed on Nightly Business Report were very bullish.<\/p>\n

{snip}<\/p>\n


\n
\"Swift<\/a>
Swift Transportation (SWFT) President and COO is bullish on the U.S. economy based on the freight his company sees<\/figcaption><\/figure>
\nSource: Nightly Business Report<\/a><\/strong>
\n<\/center><\/p>\n

{snip}<\/p>\n


\n
\"Covenant<\/a>
Covenant Transportation Group CEO David Parker is also bullish on the U.S. economy<\/figcaption><\/figure>
\nSource: Nightly Business Report<\/a><\/strong>
\n<\/center><\/p>\n

Perhaps inventory levels are so high specifically because retailers are anticipating very strong future sales.<\/p>\n

{snip}<\/p>\n


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