As the global economy picks up, we’re all going to ship stuff. Transportation and shipping sector players are feeling positive about the prospects for the sector and its exchange traded funds (ETFs) in the coming year.
The shipping and transportation sector is looking more promising than it has in a long time. A few reasons:
- FedEx (NYSE: FDX) is one industry player that likes the looks of it. While growth in the United States has stayed tepid, FedEx has spotted other opportunities for growth in Asia. Domestically, FedEx is focusing on commercial business for now. FedEx’s word isn’t being taken lightly by analysts; the company is considered an economic bellwether because it ships such a wide variety of items, reports the Associated Press.
- The Claymore/Delta Global Shipping (NYSEArca: SEA) has outperformed the broader market by a wide margin and this is giving investors reason to give the sector a second look. Year to date, SEA is up 14.5%, while the S&P 500 has risen only 4%, says Don Dion for The Street.
- Congress created a transportation reauthorization bill to both modernize freight transportation and clean it up by favoring certain innovations. World Wire reports that a roadmap for modernizing the U.S. freight system, making it more reliable and faster, and reducing greenhouse gases and air pollution is in the works. Congress should direct any freight improvement funding to encourage clean freight solutions to improve freight’s performance and protect public health and the environment. [Transportation ETF: Hitting Bottom?]
Over the recession many ships were sidelined in an effort to reduce idle capacity; it’s similar to what’s seen in the airline industry when passenger demand is down. SEA represents exporters and shippers from Greece, United States, Bermuda, Bahamas, Hong Kong, China, Japan and Singapore. [Why Transportation ETFs Matter.]
For more stories about shipping visit our shipping category.
- Claymore/Delta Global Shipping (NYSEArca: SEA)
- iShares Dow Jones Transportation Average (NYSEArca: IYT): holds primarily rail and shipping companies
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.