Amid the Financial Turmoil One Economic Indicator is Soaring
The financial world is coming unglued again. Greece has pushed the E.U. to the brink. Global stock markets are tumbling.
And yet, at the same time at least one economic indicator is soaring. The Baltic Dry Index.
Today, the BDI jumped nearly 9%. The largest daily jump in at least the last six months.
Baltic Dry Index - Composite Shipping Index - CHART
In fact, the index is up 40% since the end of April. A jump that has roughly coincided with the recent decline in global stock markets.
The BDI tracks global shipping rates. A rising index generally means more trade, as goods are sailed around the world.
So what's going on? Are nations buying and selling more, even as the economy tailspins?
Digging a little deeper, the recent rise in the BDI is attributable mostly to a jump in rates for one particular ship type. Capesize.
Capesize vessels are amongst the largest in the world. Typically with capacity over 150,000 long tons of deadweight. (Back in the day, such ships were too large to sail through the Panama Canal. Therefore, they had to transit the Cape of Good Hope or Cape Horn. Thus the name.)
Interestingly, capesize vessels are the weapon of choice when it comes to transporting metal ores. This category also includes oil tankers.
Could the jump in Capesize rates be signaling more metals and oil floating globally? And if so, is this due to buyers hungry for product, or sellers desperate to unload?
By Dave Forest for OilPrice.com who offer detailed analysis on Crude oil, Natural Gas, http://oilprice.com/Geo-Politics/ target=new>Geopolitics, Gold and most other Commodities. They also provide free political and economic intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com