Once again, the energy sector is leading the market--in fact the AmEx Oil Index is up six days in a row. What's going on? Oil commodity traders don't believe the International Energy Agency's claim that oil prices will drop in response to slower U.S. growth (which they said yesterday), and have been bidding up oil, which at $94.40 is at its highest level in a month.
The rest of the energy sector is strong as well: natural gas is near a new high, as is heating oil.
Throw coal into the mix: it's up 40 percent in a month! What's up? China is now an importer, there's been torrential rains in Australia, and lots of logistical issues. Coal producer Massey at a new high.
I mentioned earlier that Goldman upgraded the entire trucking sector, but in particular took YRC Worldwide and Arkansas Best off the "sell" list. The reason? The American Trucking Association (ATA) publishes a widely watched monthly Tonnage Index that tracks shipments by truck. The index posted positive growth for the second month in a row after declining for 14 of the prior 16 months.
According to Goldman, trucking freight shipments typically fall before a recession and stabilize once the U.S. is in recession on the back of easier comparables.
They go on to state:
"We believe that (1) the U.S. is in or will soon fall into a recession, (2) the ATA tonnage index has likely begun its stabilization period, and (3) the Fed will continue to cut rates to spur growth - all positive signs for trucking stocks..."
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