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The light at the end of the tunnel is just the light of an oncoming train.” – Robert Lowell
After a nice rally to start the week, US stocks are looking to rally again today. There’s a decent amount of economic data on the calendar today, and it kicked off with a stronger than expected Empire Manufacturing report for September (17.0 vs 5.5). Besides a reading of 17.2 from July, the was the highest level in the index since the start of 2019.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, market performance in the US and Europe, economic data in China, trends related to the COVID-19 outbreak, and much more.
While much of the market has been experiencing a bit of a pullback this month, the Dow Transports have bucked the trend and remain right near 52-week highs after a rally of over 75% from the index’s March lows. An example of the index’s strength is the fact that of the eleven S&P 500 stocks that hit 52-week highs on Monday, five of them were from the Transports. A continued move above its recent highs would likely mark the beginning of a longer-term breakout.
On a relative strength basis, the recent strength in the Transports has also broken a downtrend that has been in place for upwards of two years now. What makes the relative strength of the index even more impressive is the fact that of the 20 stocks in the index, six are airlines, and they haven’t contributed much of anything to the index’s rally…yet.