The Latest Rail Data Is The Most Bullish Thing We've Seen In A Long Time

There’s little question that the economic data has been weak of late.

Job growth has been poor. Retail sales are on a multi-month decline. Initial claims seem to be ticking back up.

But it’s not all horrible.

From Cullen Roche at Pragmatic Capitalist, the YOY change in rail traffic is starting to re-accelerate again.

Rail is a hugely useful economic indicator, so this is potentially a significant development.

Pay attention, in particular, to the black 10-week moving average line, which is turning back up.


Photo: Pragmatic Capitalist

In light of this data, it’s interesting that rail giant CSX reported earnings yesterday, and generally sounded pretty favourable.

The stock is up 1.1% today.

Here’s their Q3 outlook in one slide. Note that the majority of markets are showing a favourable outlook.


Stuff like this is far more important than stuff like the Philly Fed indicator which, will interesting, is much more of a sentiment measure than anything else.

Meanwhile, the housing data also continues to look pretty good.

Housing starts had a huge number yesterday.

And even though today’s existing home sales were mediocre, the inventory number continues to collapse.

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