Scott Grannis is the retired Director and Chief Economist of Western Asset Management Company. Western Asset now has over $420 billion under management.
On Wednesday, Scott drew attention to a chart that he says "is one of the most bullish I have in my extensive chart inventory":
A few things stand out about this chart:
- There is clearly a high correlation between truck tonnage and the S&P 500 Index. When U.S. truckers are hauling more stuff, it's generally a good barometer of economic activity. And economic activity is a good sign for businesses, which is a good sign for the U.S. stock market.
- Truck tonnage had flat-lined in 2016, leading up the November election. Once uncertainty about the election was removed, you see a sharp spike in truck tonnage beginning in 2017.
- Indicators such as truck tonnage should not be used as a market timing mechanism, but they can be used as one data point (among many) to confirm strong economic activity, which should be bullish for stocks.
Source: Scott Grannis, "Keep on truckin'"
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