We all know how well the stock market has done since its recent bottom in early March. But has it done too well? Has the market’s recovery gotten ahead of the economy’s recovery?
Economists will measure the recovery in all kinds of ways, but for one easy-to-understand snapshot, I recommend you look at the Baltic Exchange Dry Index (BDI).
Quite simply, it gives you a good sense for how much “stuff” is being shipped by sea.
Technically the BDI is a measurement of the cost to transport dry cargo, such as coal, cement, steel, grains, etc. It is produced by the Baltic Exchange in London and takes into account about 20 worldwide shipping routes.
I think this is a telling indicator because it gives us a sense for the amount of goods shippers are carrying, clues us in to supply and demand, and helps us measure strength of demand in different geographic regions around the globe.