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Signs of Recession or More Noise?
Old 07-14-2019, 01:34 PM   #1
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Signs of Recession or More Noise?

I was listening to the "trucking" station on Sirius XM yesterday and they were discussing the current self-described freight recession. I was somewhat shocked to hear that many of the trucking companies have had pretty bad numbers going back for a while. Over the last 52 weeks, some of the biggest players:

JB Hunt; stock down 23%
Schnieder; down 34%
Knight Swift; down 12%
Arcbest; down 39%

Also,

Quote:
New truck orders soared in June, July and August of 2018 (SONAR: ORDERS.CL8), typically the three slowest order months of the year. Fleets raced to place orders so they could have new equipment to take advantage of a hot freight market. That led truck makers to pull ahead business that typically is booked in the fall.

Orders began to ease in November 2018, and have been lower every month on a year-over-year basis since. The 13,100 orders placed in June compared with 42,200 placed in the same month last year.
https://www.freightwaves.com/news/ac...in-a-recession

Granted, this is a small sliver of the economy in general, but it seems as though it's been largely ignored.
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Old 07-14-2019, 02:03 PM   #2
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Hard to say whether it is a signal or not. If truck deliveries of goods are dropping off, you might expect to see an effect on the downstream side, specifically the volume of trash. Yet Waste Management is up 40% in the past year.
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Old 07-14-2019, 02:10 PM   #3
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Counter argument - https://www.calculatedriskblog.com/2...year-over.html
U.S. Heavy Truck Sales up 12% Year-over-year in June, Near All Time High

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Old 07-14-2019, 02:31 PM   #4
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In contrast with the Dow Jones Transport, the Baltic Dry Index is at an all-time high.
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Old 07-14-2019, 02:51 PM   #5
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Interesting. Gotta love how numbers can be skewed to push a story and/or agenda.
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Old 07-14-2019, 03:17 PM   #6
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Mere noise.

What really matters is Bangladesh Butter Production. Even Forbes says so: https://www.forbes.com/sites/moneybu.../#58730801df85

Quote:
Bangladesh butter production surged in February, as moderating grain prices allowed Bangladeshi dairy farmers to boost production by getting higher milk yields from their existing stock of cows. Meanwhile, butter production in neighboring India dropped significantly in February, as a change in government farm subsidies forced Indian dairy farmers to cull their herds. With Bangladeshi butter production set to rise further, we should be looking at a massive rally in the S&P 500 throughout March and April.
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Old 07-14-2019, 03:59 PM   #7
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Mere noise.

What really matters is Bangladesh Butter Production. Even Forbes says so: https://www.forbes.com/sites/moneybu.../#58730801df85
Mmmnn. Butter. Gonna put some on my ribeye tonight. Garlic butter. Since I'll be using Irish butter, the Bangladeshi market will likely tank tomorrow. FWIW, I don't us JB Hunt to deliver my butter. Not yet. Getting by with YRC.

YMMV!
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Old 07-14-2019, 06:14 PM   #8
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Predicting recession is not much more reliable than the weather.

Seems like their is always an unexpected gotcha to explain why the always accurate method failed.

Personally I would like to see a correction sooner than later but that is for my own selfish goals.
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Old 07-14-2019, 06:42 PM   #9
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We had a correction last year. Did everyone miss it?
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Old 07-14-2019, 06:47 PM   #10
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First it's the yield curve inversion, now trucking is taking a sharp U turn.

It's either the sign of the apocalypse or a sign or a recession.

I guess I'll just remain calm and carry on.
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Old 07-14-2019, 06:49 PM   #11
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We had a correction last year. Did everyone miss it?
I for one miss it almost every day. It was a good correction.
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Old 07-14-2019, 06:57 PM   #12
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Seems like more trucks on the road than ever.
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Old 07-14-2019, 07:10 PM   #13
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Seems like more trucks on the road than ever.
Thus the noise!
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Old 07-14-2019, 07:44 PM   #14
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Quote:
Originally Posted by ExFlyBoy5 View Post
I was listening to the "trucking" station on Sirius XM yesterday and they were discussing the current self-described freight recession. I was somewhat shocked to hear that many of the trucking companies have had pretty bad numbers going back for a while. Over the last 52 weeks, some of the biggest players:



JB Hunt; stock down 23%

Schnieder; down 34%

Knight Swift; down 12%

Arcbest; down 39%



Also,







https://www.freightwaves.com/news/ac...in-a-recession



Granted, this is a small sliver of the economy in general, but it seems as though it's been largely ignored.


At first glance, I thought these were declines in revenue for the listed truckers, then I realized it was share price. Anecdotally I was out late last night and noticed the huge overflow of trucks from the truck rest stop onto the shoulders of the interstate.
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Old 07-14-2019, 09:59 PM   #15
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Well the guy running for president to promote his basic guaranteed income model (One thousand dollars per adult) uses the trucking industry disruption by AI as a doomed industry. At least for the workers. And the companies will have to completely re tool their fleets to compete. And Amazon is gearing up to be its own delivery company.
I worry when you guys worry -so now I'm worried.
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Old 07-14-2019, 10:16 PM   #16
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i make plans when others worry ( can i exploit the trend if the worries are well founded AND unfoundered , or should carefully edge for the sidelines while i atill have a profit ... stuff like that )

is the US ( or even Australia ) traveling along nice and dandy ( not a chance )

but is it a little cloudy or a storm coming

the yield curve inversion is normally a forward indicator of 12 to 18 months into the future ( certainly a nice amount of time to start hatching a plan for 'what if ' )

and depending on your perspictives the US isn't the only weakening ( or weak ) economy so a shock in say , Japan or Korea might be just as disruptive
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Old 07-15-2019, 04:27 AM   #17
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On Friday, JBHT popped 5.9%.
"Analysts are expecting J.B. Hunt Transport Services, Inc. JBHT to have earned $1.35 per share on revenue of $2.26 billion in the latest quarter. J.B. Hunt shares climbed 5.9% to close at $92.94 on Friday"
https://www.benzinga.com/news/earnin...r-july-15-2019

Will a thud today (Monday) follow the pop (Friday)?
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Old 07-15-2019, 04:55 AM   #18
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Quote:
Originally Posted by KenZ71 View Post
Predicting recession is not much more reliable than the weather.

Seems like their is always an unexpected gotcha to explain why the always accurate method failed.

Personally I would like to see a correction sooner than later but that is for my own selfish goals.
Seems like weather prediction these days is far more reliable than recession prediction - certainly short term.

Remember around Xmas 2018? Almost a bear market.
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Old 07-15-2019, 05:00 AM   #19
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Quote:
Originally Posted by Red Badger View Post
Mmmnn. Butter. Gonna put some on my ribeye tonight. Garlic butter. Since I'll be using Irish butter, the Bangladeshi market will likely tank tomorrow. FWIW, I don't us JB Hunt to deliver my butter. Not yet. Getting by with YRC.

YMMV!
I'm not so sure about YRC they lost our pallet from Anchor Hocking containing of all things butter dishes. We had to have it reshipped, it was delivered this time by Ross Express. The driver who I see often said he is out straight doing deliveries and pickups.
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Old 07-15-2019, 05:03 AM   #20
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This article is about a small trucking company that shut its doors without warning. Amazon as a competitor is mentioned.
https://finance.yahoo.com/news/ltl-c...165205488.html

Another thought is that it is possible for a sub-sector to be in a recession. Doesn't necessarily mean it's a signal for complete economic downturn.
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