Live Markets: Transport stocks driving for roughest ride since Sept

ArcBest

03/12/2024 19:19

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    TRANSPORT STOCKS DRIVING FOR ROUGHEST RIDE SINCE SEPT
    The Dow Jones Transport Average  .DJT  is down 1.8% on
Tuesday, tracking for its biggest daily percentage decline since
Sept. 20 with some of the biggest drags from companies including
Fedex Corp  FDX.N , down almost 4%, and its rival United Parcel
Service  UPS.N , down 3%. Trucking companies are also falling. 
    Earlier, Bernstein cut its FedEx  FDX.N  stock rating to
"market perform" from "outperform" ahead of Q2 earnings, due out
Dec. 19, and an impending less-than-truckload (LTL) freight spin
off decision, in a note dated Dec. 2. 
    While Bernstein analyst David Vernon highlighted concerns
that are specific to Fedex, which reports its results on Dec.
19, he also mentioned that "tariffs (likely under Trump) and
changes to de minimis rules will hurt airfreight volumes."
    As for Tuesday's move, Vernon told Reuters in a telephone
interview that investors may be lightening their transport loads
since recently "the stocks have moved very quickly on macro
sentiment." Recent rallies may also have investors questioning
whether Fedex can deliver results that match the strong
sentiment when it reports quarterly results.
    The Dow transportation average rose 8.4% in November for its
biggest monthly gain since June 2023. In comparison, Fedex
gained nearly 11% in November for its strongest rise since July
of this year.     
    Separately, trucking companies were selling off on Tuesday
after Saia Inc  SAIA.O , which provides LTL, non-asset
truckload, expedited and logistics services, failed to impress
with the release of its shipment and tonnage update for the
first two months of Q4.
    Morningstar analyst Matthew Young said in an email that the
data "suggests underlying trucking industry freight demand
(especially from industrial end markets) has yet to see a
material positive inflection point." 
    And Young also pointed to rallies in transportation and
logistics following the U.S. Presidential election in November,
to the point that "several have become a bit rich."
    On Monday, logistics company ArcBest  ARCB.O  also provided
an update for October and November.
    On Tuesday, Old Dominion Freight Line  ODFL.O , down 2.3%,
was the second biggest drag on the transports average behind
Fedex. 
    Other trucking companies putting pressure on the DJT
included JB Hunt Transport Services  JBHT.O , Matson Inc
 MATX.K , Ryder System  R.N , all down more than 2% and Landstar
System  LSTR.O , down more than 1%.
    
    (Sinéad Carew)
     *****  
    
    
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