I was having a beer with a friend the other night. This guy has been running a profitable little freight brokerage business for over a decade and he does very well for himself with it. Because he’s in such an economically-sensitive industry, I’m always curious to know how his business is doing. I’m especially interested to hear when his business is turning up when the market has sold off anticipating negative economic news or vice versa. This time I forgot to ask him so it’s a good thing he offered it up unsolicited.
Things have gotten pretty quiet for him over the past week or two. The couple of guys that share office space with him are in the same line of business. They, too, are finding slowing demand and increased supply among their customers. Now you can’t judge an economic cycle by a week or two for a couple of freight brokers. But sometimes I find this kind of anecdotal evidence/scuttlebutt to be far more meaningful than it appears on the surface. I find it even more interesting because it comes on the heels of a blistering stock market rally.
I’ve been monitoring and noting here the bearish signals that have been popping up lately. This should be added to the list. Right now the stock market couldn’t care less about weak economic numbers like the GDP report we got a week or so ago. At some point, especially if they start to deteriorate further, Mr. Market will have no choice but pay them heed. And everyone will point to the insider selling, technical red flags like the weekly DeMark Sequential sell signal, exuberant sentiment indicators and anecdotes like this and say, ‘we should’ve seen it coming.’