US stocks "traditional economy" sector returns in full force! Transportation industry becomes a "resistant to AI" sector: cannot be replaced by AI, outperforming the market vigorously.

For many years, the Dow Jones Transportation Average Index has been lagging behind the main stock indexes in the United States, but now it has surged ahead, outperforming the S&P 500 index by 13 percentage points in the past month and a half, nearing the largest increase since the financial crisis. The index includes industry giants such as CSX Corporation (CSX.US), FedEx Corporation (FDX.US), Old Dominion Freight Line (ODFL.US), and United Airlines (UAL.US), and its strong economic data and trend of reducing holdings in tech giants have propelled the index's rise. The demand for diversified investments by US stock investors has increased the attractiveness of the "traditional economy" sector. Previously, concerns about the disruptive impact of artificial intelligence and the huge capital expenditure plans set by super-sized data center operators for this technology prompted investors to divest from the tech sector and move towards other areas. Manufacturing data further reinforced this trend, bringing optimistic signals to investors seeking safer investments. Following the data released last week by the Institute for Supply Management showing the fastest expansion of manufacturing activity since 2022 in January, the transportation industry index has hit a new all-time high. On Wednesday, after the stronger-than-expected non-farm payroll report, indicating that the labor market is stabilizing, the index edged higher. Sameer Samana, global equity and real asset strategist at Wells Fargo & Company Investment Research Institute, stated, "This industry is the most sensitive to the economic situation, as higher levels of economic activity mean goods need to flow domestically (and globally)." Investors are seeking alternative investments to AI-related stocks, and the strong economic situation "further strengthens the positive investment logic." The transportation industry belongs to the "anti-artificial intelligence" sector, as investors are increasingly inclined to acquire companies whose main functions cannot be replicated by AI technology. Mark Hackett, Chief Market Strategist at Nationwide, explained that the recent data further boosted transportation stocks in several ways. He stated, "It's obvious that if manufacturing demand increases, transportation demand will also increase." This also indicates that the overall economy is improving, serving as a key technical signal for investors buying into stocks that benefit first from economic recovery. However, some warn that future returns may be limited, at least for some companies. Citigroup analyst Ariel Rosa downgraded four trucking companies including Old Dominion Freight Line following the ISM data release. Rosa wrote in a note to clients that the improvement in the economic environment for these companies "is already largely reflected in the stock prices." Last week, Greg Swenson of the Leuthold Group described the aerospace, railway, and freight industries as "mixed blessings." However, he is more optimistic about the prospects of air cargo, freight, and logistics. Benchmark analyst Christopher Kuhn, who tracks trucking stocks, pointed out that the ISM manufacturing quality index has only expanded for a month, but if trucking demand rebounds, related companies will quickly benefit. He believes that there is still upside potential for the trucking sector. Kuhn said, "As long as revenue increases a little, sales increase a little, prices rise a little, you can see a large amount of incremental profit flowing into net profit."