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Illustration: Sarah Grillo/Axios
Why it matters: Transportation can be a doubly important signal about the health of the economy. More planes, ships and trains transporting cargo mean companies are selling products and business is growing. More passengers on planes, trains and ships also means more people feel economically confident to travel.
What's happening: Freight and passenger transportation is slowing across the board.
Air cargo shipments also are solidly negative. April was the first month in which every region on Earth, without exception, showed lower outgoing and incoming changes in weight, year over year, according to cargo market database WorldACD.
What they're saying:
What to watch: The probability of an economic downturn in 2020 is at least 40% due to a falloff in auto sales, an increase in unsold inventory and weakness in government spending, Noel Perry, principal and economist for Transport Futures, told a transportation industry conference in April.
"For both incoming and outgoing air cargo, each region returned [year-over-year] volume figures worse than the first quarter of the year, underscoring the clear slow-down in global business," WorldACD, a global air cargo market database, said in its latest release.
Why it matters: The numbers could very well get worse. This and other surveys were conducted before President Trump reignited the trade war by tweeting the U.S. would raise tariffs on China to 25% on May 5.
Yes, but: The U.S. went through a transportation recession in 2016 and the global economy managed to avoid recession. Economists looking on the bright side point to the slowing global growth environment that year as evidence that markets can bounce back.
The U.S. has managed to largely avoid the slump that has hit Asian and European manufacturing industries this year, but May's reading of both the IHS Markit and ISM PMI numbers shows luck may be running out quickly.
A reading on global PMI released Monday showed manufacturing is falling into contraction for the rest of the world.
May marked the 9th straight month manufacturing growth has contracted. Business optimism fell to its lowest level since future activity data were first collected in July 2012.
The tech-focused Nasdaq Composite closed 1.6% lower on Monday — now 10% from the index's record high — as reports about heightened antitrust scrutiny for Apple, Facebook, Amazon and Alphabet hit those companies' share prices, Axios' Courtenay Brown writes.
Why it matters: Big Tech companies have been the portfolio darlings for investors and hedge funds. Until recently, any threat of regulation in the U.S. was largely ignored by Wall Street, but that may be changing.
St. Louis Fed President James Bullard issued the opening salvo in the Fed's capitulation to the market on Monday, saying an interest rate cut “may be warranted soon.”
What he said: Bullard, a voter this year on the Fed's rate-setting committee, cited the rising risk of global trade tensions and weaker-than-expected inflation as reasons he could favor cutting U.S. overnight interest rates.
What he didn't say: Ignoring commentary from Fed Chair Jerome Powell and other FOMC policymakers so far this year who insist the Fed plans to hold rates steady, the bond market and Fed fund futures have been pricing in multiple rate cuts by year-end.
Between the lines: If the Fed does cut rates this year — some analysts predict it will be as early as September — it would add further fuel to the fire of Fed critics who say the stock market is dictating U.S. monetary policy.
Flashback: The Fed had signaled it planned to raise U.S. interest rates 3 times this year as recently as November.