tsptalk's Market Talk

[alevin]

I'm a train transport observer, myself. I've never seen so many empty railcars, trainloads of them, parked on sidings in the middle of nowhere, out of sight out of mind of general public. Been seeing that since back in October/November.

 

[nasa1974]

I'm a train transport observer, myself. I've never seen so many empty railcars, trainloads of them, parked on sidings in the middle of nowhere, out of sight out of mind of general public. Been seeing that since back in October/November.

I've got tracks back at the end of my property and there is train movement a couple times a day lately. I can't tell if the various cars are empty or full, but at times they have 3 engines in front. Once in awhile I see one in the middle of the line.

 

[tsptalk]

Economic red flags. Yields and oil falling again...

 

[James48843]

I'm a train transport observer, myself. I've never seen so many empty railcars, trainloads of them, parked on sidings in the middle of nowhere, out of sight out of mind of general public. Been seeing that since back in October/November.

How do we find actual data on how railroads are performing? Are there charts anywhere that track train cars loaded, or perhaps income streams of actual railroads? How do I find actual railraod shipping hard data?

If trains are being sidelined, like we are seeing trucking taking a hit, those could also be very good indicators that the tide is turning.

I know I have heard of some steel mills closing as well.

 

[James48843]

Never mind- I found this- let's check their actual railroad data from union pacific when it is released later today:

Article from Barrons:

Union Pacific Will Likely Report Lower Rail Freight Volumes. Wall Street Won’t Care.

By Bill Alpert

Jan. 22, 2020 11:08 am ET

The biggest railroad play, Union Pacific, is expected to report Thursday morning that it suffered a 10% drop in freight volumes in the quarter ended in December and lower earnings. Investors are fine with that. The stock (ticker: UNP) hit an all-time high last week of $185.

Wall Street has been enamored of freight trains lately, as the industry has widened profit margins with the cost-cutting programs espoused by the late leader of CSX (CSX), Hunter Harrison. So even as shipping volumes tanked last year, investors cheered announcements like last week’s earnings report by CSX, in which it said that revenue for the past quarter dropped 8% but costs reached a new low as a percentage of revenue.
Across the board, railroad stocks are trading at record prices this month and above-market earnings multiples of at least 20-times this year’s expected earnings.

See our cover story about high-price railroads: Railroad Stocks Could Struggle as Challenges Mount

So there you have it- Railroads are getting lower revenues as well, and seeing a decline, yet their stocks keep going up.

Folks- we're having a bubble up here. As I said earlier- look for the signs and be ready to move quickly- because at some point, it's going to be a sea change.

 

[James48843]

Details on Union Pacific- revenue was hit harder than expected- down 11% in December's quarter. Only cost-cutting saved them for now.

Cost Cuts Helped Union Pacific Offset a Drop in Revenue. Its Stock Is Climbing.
By Bill Alpert

Jan. 23, 2020 9:19 am

Freight traffic at Union Pacific fell even more than expected in the quarter ended in December, dropping 11% from the prior-year period, but the railroad’s fierce cost cuts brought in earnings only slightly below Wall Street’s forecasts. That may be enough for train fans to keep their faith in the country’s biggest rail stock, which hit an all time high this month despite its industry’s traffic funk.

In premarket trading Thursday, Union Pacific stock (ticker: UNP) was up 1.7% at $184, a bit below its record of $185.

More:
https://www.barrons.com/articles/un...-cost-cuts-revenue-freight-volume-51579789041

 

[nasa1974]

How are we shipping all these goods around the country then? Rail traffic down and the truck companies are hurting as well.

 

[James48843]

How are we shipping all these goods around the country then? Rail traffic down and the truck companies are hurting as well.

We aren't. that's the whole point.

Sales appear to be falling now with less goods being shipped- and therefore less goods being sold. We know that prices are not climbing- at least very little inflation showing anywhere. Just lower shipments of goods all around.

That's gotta show up in the market someplace very soon.

We have to have been working off inventory the last couple of months.


I don't know. I just took a look at a whole lot of statistics over at the St. Louis FRED site- that there ISN'T any data showing significant falling retail sales-it's mostly flat.

https://fred.stlouisfed.org/series/SLRTCR03USQ180S

That does not jive with the railroad and trucking data.

Wonder who is lying. It's gotta be somebody...

 

[alevin]

Don't think anyone saying goods are not moving, just much lower volumes moving. consumers subsisting on debt getting tapped out on their cc's. I made a train traffic comment back years ago, circa recession or early post-recession, Birchtree of longtime tsptalk fame said noting abnormally low volumes of train traffic is a good indicator of the economy, even if anecdotal. My observation opportunities are along the UNP lines and the B&N lines. southern and eastern rail lines are different rrs, maybe different regional economies.

 

[tsptalk]

Stocks are down, but here are two key charts that the stock market is watching: Treasury yields and the high yield corporate bonds...

 

[tsptalk]

Nice rebound in stocks today. We're seeing some gaps trying to get filled, and that may be the upside target unless the bulls have more fire power than that.

The EFA (I-fund) has stalled at the 50-day EMA after falling below it on Monday.

 

[tsptalk]

The S&P gapped down at the open and this late morning rally is trying to fill that gap near 3270. The question is if it can go further than that or will the gap, once filled, hold as resistance?

 

[tsptalk]

Wow, quite the whippy day today. Investors don't know what to do...

 

[kb9nvh]

Looks to me like investors made their decision on which way the market is going to go at 4pm today.

Sent from my ONEPLUS A6003 using TSP Talk Forums mobile app

 

[tsptalk]

Looks to me like investors made their decision on which way the market is going to go at 4pm today.

Yep, and Amazon is helping them after hours.

 

[tsptalk]

C and S funds testing their 50-day EMAs...

 

[genod]

Tom,

Do we have any old gaps from couple months ago? I seem to recall that we still do and I think I see one on the SPX back in early December? :thinking: If so, are they still relevant? I thought all gaps get filled sooner or later.

 

[tsptalk]

Good call, genod. It's time to start looking for potential downside targets...

 

[genod]

OK, good to know. That October gap is around an 8.5% drop from yesterday's close.

 

[tsptalk]

The S-fund small / mid cap index is getting a bounce off the 50-day EMA. Unfortunately the Russell 2000 small caps index is below it and struggling to get back above it today so far.