Web Statistics baltic dry index chart 2016 - baltic dry index 2016

Sunday, 13 November 2016

baltic dry index chart 2016 - baltic dry index 2016


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baltic dry index chart 2016 - baltic dry index 2016

"baltic dry index chart 2016 - baltic dry index 2016" 

Is another play starting to launch higher in response to a sudden market shift toward heightened growth expectations as a consequence of the surprise election of Donald Trump as US President-elect. The shift in the executive branch lines up a unified power column in the hands of republicans, which allows for more aggressive policy action to try to accelerate economic growth in the US economy. So far, based on Mr. Trump’s own statements, markets have begun to strongly speculate on a major fiscal stimulus program that will grab the baton from the Federal Reserve next year.

As a result, markets have shifted radically, with longer-term interest rates spiking higher, along with copper, iron ore, nickel, and shipping prices, as the world prepares for a large infrastructure upgrade project in the world’s largest economy.

As noted above, the Baltic Dry Index of shipping rates has soared in the past several days, rising by as much as 20%. But the speculated rise in demand isn’t the only factor at work here. To wit, the Hellenic Shipping News website put out a piece of analysis on Thursday noting that, “Capesize one-year time charter rates will double over the next five years from the lows of 2016. The reasons for a sharp contraction in the supply and demand gap are improving demand outlook coupled with a slowdown in vessel supply due to high scrapping and continued low deliveries along with scarce new-orders.”

That has presented the sector with a major local catalyst. And it has been embraced, explosively.

The dry bulk shipping industry has been in a long and deep decline and stagnation since the collapse of the global economy in 2008. 

This is one of the few groups to show no serious recovery at all in the past 8 years. With the expected implementation of a major fiscal stimulus program in the US likely tied to massive overhaul action in the infrastructure space – repairing or rebuilding bridges, hospitals, airports, railways and rail stations, highways, public transportation systems, and the like – it should be no surprise to see the shipping stocks start to ramp. Here is the chart....

baltic dry index chart 2016 - baltic dry index 2016

baltic dry index chart 2016 - baltic dry index 2016

The materials involved in that type of operation amount to a massive movement of millions of tons of metals, ores, sediments, lumber, and building supplies of all types from the four corners of the Earth to be plugged into the infrastructural system of the United States.

Given the lack of a reflation-based revaluation in the shipping stocks up until now, this move may have more room to run and we would not ignore names such as GOGL.

Recent action has seen 20% during the past week in terms of shareholder gains in the stock. Market participants may want to pay attention to this stock. GOGL has a history of dramatic rallies. In addition, the listing has seen interest climb, with an increase in recent trading volume of greater than 160% over what the stock has registered over the longer term.

We have our overall outlook for pending 2017 period in the coming newsletter

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More updates coming please stay tuned


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