The Differing Stories Told By Commodities and Transportation Stocks

From Ed Yardeni:

It’s good to see that the US economy continues to be an important source of strength for the global economy. Over the past few years, there has been a close correlation between the CRB raw industrials spot price index and the S&P 500 Transportation Index. Since the summer of 2012, the former has been relatively flat, while the latter has gone on to make numerous new record highs during 2013.

I view the commodity index as a sensitive indicator of global economic growth that has been especially sensitive to the pace of growth in China. The Transportation Index tends to be a more US-centric economic indicator. Its bullishness is confirmed by railcar loadings. Total loadings rose to a cyclical high in early November. Intermodal loadings rose to a record high. The ATA Trucking Index also rose to a new record high in September....MORE