The Dow Transport stocks are up big today, partly on news that China’s economy isn’t headed into the tank. The source for that relieving news comes via the Chinese government’s famously accurate statistics bureau which reported a surge in exports in March.
Despite the jump in transport stocks today, the medium-term trend of the Transports to the industrials remains down. Transportation stocks tend to be a leading indicator of U.S. growth. If growth was picking up, we would hope to see confirmation in the relative performance of the transports to the industrials. We don’t, leaving one to conclude that economic growth continues to wane as it often does in the winter stage of the economic cycle.
