June's rail traffic numbers certainly offer up a mixed message. Investors and economists who believe that the recovery is in a rough patch but still ongoing can find support for their position. Likewise, those who believe that the recovery is gasping for breath (if not toppling over) can find their own "ah ha" moment in the numbers. All in all, it makes for a tough backdrop for rail and transport investors; Wall Street typically hates uncertainty and it would seem to only be a matter of time before their ongoing faith in the rails is sorely tested.
U.S. Traffic - Some Good, More Bad
On the plus side, U.S. rail traffic did grow 0.9% from last year's June and the number of positive reporting categories (that is, traffic categories with year-on-year growth) expanded from eight in May to 14. That concludes the good news portion of today's article.
On the down side, traffic dropped again on a
sequential basis (0.7%). Now, it is not all that unusual for rail traffic to slide sequentially into the summer months. If this year follows the template, traffic should bottom in July and rebound into and through the fall.
To read the full piece, please click below:
http://stocks.investopedia.com/stock-analysis/2011/No-Summer-Holiday-Yet-For-Rail-Traffic-UNP-CSX-NSC-BOX-TGH-CP-HTLD0712.aspx
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