In an attempt to give equal time to good news—there seems to be a bias towards the reporting of "bad" news these days—I show the latest version of the Harpex Shipping Index, which tracks the rates charged by container ships in the N. Atlantic. The very strong improvement in this index in recent months contrasts quite sharply with all the bad news coming out of Europe. On that score, I would note that Greek credit default swaps have dropped over 200 bps in the past week, the Euro is up about 5% from its early-June low, 2-yr Euro swap spreads have fallen 15 bps from their late-May high, and the DAX index of German equities has outperformed the S&P 500 by 13% since the end of April; those are some distinctly positive changes on the margin coming out of Europe that haven't received much publicity.
Scott,
ReplyDeleteSeems like there is also some good news on year over year auto sales comparisons for US autos.
In focusing on the problems within Europe's 'micro economies', very little attention is paid to the world class economies of Germany and France. They are both doing fine and with a somewhat lower euro they likely will continue to do so. I hope Scott continues to keep us posted on the Harpex.
ReplyDeleteBill,
Ford (F-NYSE) is holding its own very well during this market selloff. I have been looking for an entry point and perhaps I have found it. Ford seems to have a portfolio of very attractive vehicles and Lincoln is capable of becoming a very competitive luxury brand. As the economic recovery builds (admitedly much more slowly than we hoped) F is capable IMO of delivering some very high returns. Those interested should do their own homework, as F still has a high degree of debt (though it is coming down) and a full blown recovery still appears to be a ways off.
Exports of services from the US other than transportation are exhibiting remarkable resilience. More at:
ReplyDeletehttp://wjmc.blogspot.com/2010/07/us-service-exports-exhibit-resilience.html
Thank you for the opportunity to comment...
Scott,
ReplyDeleteHow do you reconcile strong a Harpex shipping index with a weak Baltic Dry shipping index?
Again, thank you much for your daily blog posts -- they are great.
Regards,
Michael
The two shipping indices are completely different. Baltic covers shipments of commodities in the Pacific area, the Harpex covers shipments of containers in the N. Atlantic. Each can be influenced by a different set of factors. The Baltic may be depressed right now because of the delivery of a lot of new shipping capacity.
ReplyDelete