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Dry Bulk Index

11/15/2016
By Charles Payne, CEO & Principal Analyst

There are a lot of areas that reflect new hope for the economy. There is one that might seem odd based on worries of the global trade war - the Dry Bulk Index has rallied 230% from its lowest point in January and 15% since the election. Dry bulk ships carry 15% of the world’s total merchandise, which is mostly focused on ore, coal, and grains.

Years ago, there was a time when this index was being used as the primary gauge for the health of the global economy.  Carriers began ordering ships that were more than 1,000 feet long and got in trouble when the world economy slumped. It’s not a pure proxy for what’s going on; as of now, the rally is due, in part to renegotiated deals. However, there is an element that reflects the health of trade.

Interestingly, this move (already set in motion) implies the market doesn’t see a trade war. In fact, it sees a Trump economy that will spur growth, putting America in a position to be the straw that stirs the global drink.

The star in the industry is Dry Ships (DRYS), which rallied 208% yesterday, and 813% over the past five sessions. By the way, if you think that’s too much and too fast to understand, the stock is still down 99.9% from its May 2008 split-adjusted high.

 

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Charles Payne
Wall Street Strategies


 

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