From The Pragmatic Capitalist:

Nothing has been more confounding during this equity rally than the weakness in the underlying fundamentals of the transports.

Without fail, the data from the transports has been an excellent leading indicator in past recessions. Warren Buffett has even admitted that the rail data is his single favorite indicator to watch. But as equity market have ripped higher, the rails and other transports have lagged.

Of course, as time has passed we have witnessed the enormous influence of government stimulus on the economy and the incredible impact of money printing on asset prices. As we begin to see signs that government stimulus is failing to generate jobs and a sustainable recovery, the transports...

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