The shipping industry, which serves as the arterial system for the economy, is feeling the chill of a slowdown.
As U.S. growth decelerates, an overwhelming majority of trucking companies tracked by Merrill Lynch expect shipping rates to either fall or stay flat, the firm said on Friday, as its Truckload Diffusion Indicator tumbled to its weakest levels since October 2016.
The index, a barometer of the freight-hauling industry, is now down 29% year over year, and shippers’ outlooks are broadly negative to neutral.
The sluggish conditions cited by Merrill Lynch in its report appear to be playing out around the country. The Cass Freight Index, watched by some market analysts as a bellwether of the broader shipping industry, fell for the fifth straight month in May.
I have been following in particular one trucking company, J.B. Hunt Transport Services, Inc. (JBHT) - full truckload freight transportation services throughout Canada, Mexico and the United States. However, I wasn't able to participate on its decline.
Another stock worth keeping an eye on is Landstar System, Inc. (LSTR) - Asset-Light Provider: border crossing, emergency, expedited, less-than truckload (LTL), rail intermodal, temperature controlled and truckload van. If price closes below $92 (white dashed line), look for price to head down to the monthly demand at $82, then $65.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.