Chart Book

Chart of the day: Baltic Dry breakdown

PUBLISHED : Tuesday, 07 October, 2014, 5:26am
UPDATED : Tuesday, 07 October, 2014, 5:26am

The Baltic Dry Index became the key real-time indicator for world economic health with a string of early warnings of shifts in the global trade cycle from 1995 to 2004. A false signal in 2004 of a downturn that never came and overly pessimistic readings of slowdowns since 2010 has tarnished it since. Zahra Ward-Murphy, an analyst at Absolute Strategy Research, reckons the modest growth expected in the world shipping fleet over the next few years could boost the Baltic Dry's reliability. If so, the bearish signal it is sending for the likely direction of returns from global stocks and bonds will trouble investors worldwide. Right now, Ward-Murphy advises extreme caution when trying to read the Baltic Dry.