Baltic Dry Index Jumps Another 100 Points Today
The Baltic Dry Index closed up higher today by 100 points, reaching a 7-month high of 2,432 (see chart above).CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Thursday, May 14, 2009
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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5 Comments:
Is there a way to subscribe to all posts except Baltic Dry and Emerging Markets updates?
I got my own chart ticker, thanks.
The Baltic Index may be a leading indicator this time. Consequently, there may be a 50% retracement of the rally within two or three months. So, SPX may fall to roughly 800 in Jul or Aug, which may be an opportunity to buy again.
Also, I may add, I doubt there are any reliable technical indicators (which aren't much better than voodoo) to predict the stock market, although my remaining indicator is still reliable, at least so far.
Hate to monsantoize the wilting green shoots. Not. Domestic rail traffic is not keeping up with record Chinese iron ore imports. Duh!
Anonymous @ 9:10 AM,
The disparity between the Iron Ore imports and the Rail traffic make sense when you look at the way in which companies have optimized their supply chains. The rail traffic didn't pull back until pretty much into the 4th quarter - yet, if you look at consumer spending/purchasing it had dropped much earlier - leading to the high inventories that had to be cut down prior to companies wanting to ship and stock again. Perhaps they were hoping a big holiday season would pull them out, but I suspect they hadn't yet adjusted their stock levels to meet the huge drop off, and even now they are probably being cautious to see where consumer spending goes in Q2.
Manufacturers, however, are looking at the indicators from those inventories (huge draw downs in many industries, consumer spending has had a moderate rebound, while some spending/purchasing is unsustainable in the long term, for things such as autos). Looking at those things, it makes sense to start making things and preparing that part of the pipeline.
Oh, yeah.. Duh!
does this indicate an increase in commodity demand? or, is it simply chinese government stimulus money coupled with a change from internal to external sourcing due to price cuts?
"China, the world’s biggest iron-ore consumer, imported a record 57 million metric tons in April. Stockpiles in the country have climbed 16 percent this year. China’s government is spending 4 trillion yuan ($586 billion) to support the economy after first-quarter growth was the slowest this decade.
[Iron ore] price drops are making imported ore competitive against domestic supplies, spurring stockpiling . . . "
link
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