The Dow Jones Transportation Average briefly fell 6% to a 52-week low early Friday after FedEx said shipping volumes had weakened recently due to a possible global recession. bridge. In fact, Dow Transports — which includes 20 rail, airline, trucking and freight logistics stocks ranging from Alaska Air to United Parcel Service — hit its lowest level since February 2021 or 19. last month. The Dow Jones Industrial Average on Friday was just at its lowest level since mid-July. FedEx alone fell nearly 25% at Friday’s low, putting it on pace for its biggest single-day loss since it went public in the late 1970s. All that shows. bad news for the broader market outlook as outlined by over 100-year-old Dow theory. Charles Dow, founder of The Wall Street Journal, thinks moves down or up in the Dow Jones Industrial Average should be confirmed by similar moves in the Dow Transports. Divergence is bad. That’s a problem in 2022, with the Dow down 16.2% year over year and Dow Transports down more than 22%. Peter Boockvar, chief investment officer at Bleakley Financial Group, said: “As a student of the market, I think Dow theory is definitely a valid thing to follow. Although the age-old theory is followed by technical analysts or those who only study charts, the method has fundamental significance as the transportation industry was one of the first to see changes. in the economic cycle. “The FedEx news, combined with Dow Transports hitting new lows, has ominous implications for the market, at least in the near term.” The Dow Transports Index coincides with the industry confirming both uptrends and downtrends. The reason is, even though a lot of consumers shop online, because we don’t have a shipping company like Star Trek yet, we still need transportation companies to deliver the things we shop for online. Sam Stovall, chief investment strategist at CFRA Research. The start of the year remains intact as long as Dow Industrials and Transports stay below 8/16 of their peaks. A higher low from the June low, followed by a move above the mid-August high is needed for a bullish Dow Theory signal. “- Fred Imbert, Gina Francolla and Michael Bloom of CNBC contributed reporting