Is it just possible that the transport index is up because railroads, trucking companies and cargo shipping have raised prices faster than the rate of increase of their energy costs? Wouldn’t that be a logical explanation why trannys are up even though their business is down and costs are up?
For example, oil prices have skyrocketted, yet oil company profits have soared because they take advantage of the turmoil to add a profit premium to the increases. I’m wondering if transportation is doing the same thing. If it cost $4,000 more to ship a container by freighter but you charge $4,400 more to the customer, your profits go up. Ditto for trucks. They are getting killed on diesel but perhaps they are passing on all those costs plus a markup.
Just wondering...
In trying to predict the course of the market, some have noted that when the transport index outstrips the DJI, after some months a marked rally ensues. Could be. Could be not. As a long time investor, I am amazed how certain some people feel in their predictions.