Bloomberg News

Drop Wall Street for Truck Stop to See Stock Rally Driver

June 20, 2014

Trucking School

A truck driving instructor directs a student as he manuevers a truck while training at the Western Trucking School in Turlock, California. Photographer: Justin Sullivan/Getty Images

Breaker, breaker one-nine, we’re gonna need all our good buddies on Wall Street to put their ears on and listen up: If this whole Master of the Universe thing ain’t working out for you, there’s some good news.

There’s a shortage of truckers out on The Big Road. Now, the pay’s not as good as what you ratchetjaws are used to, but the job is not without perks: fashionable hats, no need for a stuffy business suit, plus all the Cracker Barrel you can eat. You’ll still have to deal with bears, but they won’t be shorting your positions. Rather, as the truckers say, they’ll be the snakes in the grass turning on the disco lights and hanging paper on you for streaking past the double-nickel speed limit.

Even if you don’t have what it takes to drive the Big Rigs and want to stay in the granny lane of Wall Street, there’s an oversized load of useful information in yesterday’s Jefferies Group LLC report titled “Truck Fundamentals Strengthen.”

First: 78 percent of respondents in a CK Commercial Vehicle Research survey said the trucker shortage is causing them to limit capacity. Here are other highlights from the Jefferies note for anyone in this market for the long haul:

•The tonnage of freight being hauled by trucks is at an all-time high, up 3.1 percent in May from the previous year.

Internet Truckstop

•Did you know there’s something called the Internet Truckstop Market Demand Index? Well there is. It’s a measurement of trucking demand and, as Jefferies analyst Stephen Volkmann points out, its last reading was up 67 percent year-over-year. It reached a record earlier this month.

•Many other fundamental trucker data points are at, or near, record levels, according to the report, which said the numbers don’t appear to be skewed by the weather.

Of course, the stock market has sniffed much of this out, as surely as a convoy can spot a Tijuana taxi full of smokeys two mile markers away. The Dow Jones Transportation Average is up 11 percent this year, nearly double the Standard & Poor’s 500 Index. Its record high on June 9 is a good sign to followers of the ancient Dow Theory that transport stocks need to rally with industrials to confirm confidence in the bull market.

FedEx Corp. on June 18 forecast annual profit that topped some analyst estimates as Chief Executive Officer Fred Smith told CNBC that he’s “relatively confident” in the economy and growth could reach 3.9 percent this quarter.

As Smith noted, there is a big caveat, and it’s what the truckers call “motion lotion:” fuel. Even as concern about sectarian violence in Iraq sent crude oil to a nine-month high, truckers so far haven’t had to contend with a spike in prices. On-highway diesel is down about 2 cents per-gallon this year and almost 7 percent lower than its 2013 high. Still at $3.882 a gallon, the price is the most at this time of year since 2010.

Anyway, whether you choose the 18-wheeler or 2-and-20 lifestyle, use this information as you will.

As the famous investors from Haight-Ashbury once sang: “Truckin’, like the do-dah man, once told me ’you’ve got to play your hand.’ Sometimes your cards ain’t worth a dime, if you don’t lay ’em down.”

To contact the reporter on this story: Michael P. Regan in New York at mregan12@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net


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