Baltic Dry Index
I’m a big index fan. I enjoy tracking numbers up and down from day to day and week to week. Not month to month, though. Who has the attention span for THAT? Kidding.
The newest index I discovered is the Baltic Dry Index, or BDI. The BDI measures the demand for room on cargo ships that transport dry bulk materials. A lower index means that fewer bulk materials are being shipped, which can be inferred to mean that less production is occurring around the world. A higher index means that ships are filling up due to more materials being shipped.
According to this old slate.com article, the BDI is an excellent leading indicator of market health because it measures transport of the first indicators of economic growth- raw materials. In an age where everyone wants to know what will happen ten moves before it happens, leading indicators are extremely valuable.
Nowwwwww the bad news: According to this easy-to-read chart on bloomberg.com, the BDI has been on a clear downward trajectory since October. I will dig deep and venture one guess as to why this does NOT mean that the economy is headed down down down: perhaps countries are sourcing more from their own materials reserves as oil prices rise? Eh? Who likes my idea?
