Citigroup analyst: Trump tax reform bill expected to drive transportation sector stocks up

Citigroup analyst Ariel Rosa wrote in a report to clients that transportation stocks rose on Tuesday as investors believed that President Trump's tax reform bill could stimulate demand in the industry after nearly three years of freight recession. Rosa stated that he would be cautious about chasing after gains in the short term. The Dow Jones Transportation Average rose 2.9%, while the S&P 500 was mostly flat. Citigroup analysts were surprised by the "significant increase" in transportation stocks relative to the overall market on Tuesday, stating that the passage of the bill "has always been seen as a possibility." Analysts pointed out that transportation stocks are "well-positioned" to outperform the market in the next 6 to 12 months, and added that after being "out of favor and under-owned," transportation stocks are attractive.