The Dow Jones Transportation Average has jumped 8.5% in the past month, compared with a 5.3% gain for the S&P 500.
Transportation stocks are on a roll, and that could be good news for the market as a whole because the group is often a leading indicator for equities.
The rise of transportation stocks also can be a sign of strength for the economy, as the companies in the sector are vital to the economy’s health.
The Dow Jones Transportation Average, which includes 20 major companies, has moved up 8.5% in the past month, compared with a 5.3% gain for the S&P 500.
Among major U.S. transportation stocks, railroad operator Union Pacific (UNP) – Get Union Pacific Corporation Report has climbed 10% over the past month and 21% over the past year. Package-delivery company United Parcel Service (UPS) – Get United Parcel Service, Inc. Class B Report has risen 5% over the past month and 31% over the past year.
Another railroad, CSX (CSX) – Get CSX Corporation Report, has gained 10% over the past month and 16% over the past year. Rival delivery company FedEx (FDX) – Get FedEx Corporation Report has increased 6% over the past month but has slipped 15% over the past year.
Some economists and investors are worried that the Federal Reserve’s interest rate hikes, which began March 16, might cause a recession. But the rise of transportation stocks could indicate otherwise.
“It suggests that perhaps the U.S. economy is more resilient or on firmer footing than some people would give it credit for,” Michael Arone, chief investment strategist at State Street Global Advisors, told The Wall Street Journal.
Meanwhile, Cowen put together a list of stocks comprising its best ESG investment ideas. The list includes:
1. Alaska Air (ALK) – Get Alaska Air Group, Inc. Report, an airline;
2. BioMarin Pharmaceutical (BMRN) – Get BioMarin Pharmaceutical Inc. Report, a biotechnology company;
3. Cummins (CMI) – Get Cummins Inc. Report, an engine maker;
4. Expedia (EXPE) – Get Expedia Group, Inc. Report, an online travel shopping company;
5. Johnson Controls (JCI) – Get Johnson Controls International plc Report, a building equipment company;
6. Lam Research (LRCX) – Get Lam Research Corporation Report, a semiconductor machinery company;
7. Planet Fitness (PLNT) – Get Planet Fitness, Inc. Class A Report, a fitness club chain;
8. Ralph Lauren (RL) – Get Ralph Lauren Corporation Class A Report, an apparel company;
9. Workday (WDAY) – Get Workday, Inc. Class A Report, a software company;
10. Yum! Brands (YUM) – Get Yum! Brands, Inc. Report, parent of restaurant chains including KFC, Taco Bell and Pizza Hut.
