Monday, April 4, 2011

Stock Market: Encouraging Strength Of The Transport Sector

The stock market showed a surprising development today: The Dow Jones Transportation Index climbed to a new multi-year high. The index contains transportation stocks, like airlines, railways, shipping companies, trucker and logistic companies (e.g. FedEx).

Over the past few weeks transportation stocks are performing better than the stock market as a whole. This over performance is astonishing, because the climbing oil price is raising the costs of the transport companies.

Apprently,  investors assess the positive impulse of the economic upswing more than the negative effect of the rising energy costs. Transportation companies are very sensible about economic development, therefore economists regard  the Transportation Index as an indicator for the current economic situation. The strength of the Transportation Index is a sign that the whole economic situation is getting better, which is also positive for the whole stock market.

No comments:

Post a Comment