Daily Chart thru Mar. 9
The latest economic news out of China is about imports and exports. The February merchandise trade surplus was $32.6 billion versus an estimate of $48.7 billion.
Exports tumbled 25.4% from a year ago while imports shrank 13.8%. On a seasonally adjusted basis, exports shrank 19.9% in February after falling 15.9% in January. The following image comes from an article that further discusses the numbers. Continue reading
January 2008 – January 2016
The video attached below is a very condensed version of what I provide to my Insider Members in their Weekend Market Analysis.
The retracement in the stock market continues and we are now rapidly approaching my targets for this 4th wave.
In the Baltic Dry Index chart above you can see that it continues to plummet to new all-time lows. I last talked about this on January 6 in the post “What is the Baltic Dry Index Saying Now?” The situation is now much worse. Continue reading
You know those machines. The ones that go beep…beep…beep as they monitor your heart rate. Well one that is monitoring global economic activity is barely beeping. The Baltic Dry Index just hit another new all-time low yesterday. Continue reading
I’ve talked about the Baltic Dry Index many times before. This index is created by the London Baltic Exchange and tracks shipping rates around the globe. They call it a dry index because it measures the shipment of dry goods that are primarily considered raw material to either the production process or to products themselves.
Things like coal, iron ore, steel and cement. Material that drives the world’s economic engines.
The chart below shows that the Baltic Dry Index has just plunged to a new all-time low. In February it first broke to a new all-time low below the July 1986 level. But Friday the Baltic Dry Index fell even further to 498.
The Baltic Dry Index is seen as a leading economic indicator as it is clearly a reflection of the movement of the raw materials that drive economic expansion. Now the skeptics will say hold on here, the supply of ships also affects the price. And yes indeed it does.
And as the Baltic Dry Index rose to a record high in 2008, I can imagine the number of ships being built was increasing as they assume demand would go to the heavens. The experts are also quick to say that it takes about 2 years to build a new ship.
According to data attributed to IHS Global Limited, the orders for new dry bulk ships peaked around the end of 2008 and the peak in new ship construction occurred around spring of 2012…almost 4 years ago.
Yet the Baltic Dry Index has continued bouncing back forth drifting lower. And in February 2015 it plunged to an all-time low. This was followed by a bounce and new hope.
But now a plunge since the end of July has resulted in a new all-time low of 498 on Friday. I find it very interesting the recent plunge began about the time that China started devaluing its currency. The first devaluation occurred on August 11 and was the largest single drop in 20 years. Actions speak louder than words.
But no worries, the experts say it’s all because of a glut of ships.
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