The S&P 500 has had a good year, up almost 30%. The yield on the 10-year note is up over twice that much, up 70% YTD. Can you name the index that is up almost 200% more YTD than the S&P 500?

The answer is…The Baltic Dry index, which is up 225% on the year. At one time many felt like this index was a good indicator of global growth or lack of. Then a period of time came when many believed that the shipping industry became overbuilt and this index lost its edge, per being a leading indicator.

Is this rally a reflection of global growth, a oversold bounce after a massive decline or just noise? Is this strong rally part of the reason interest rates shot up so much or just noise? 


Many look at the Baltic & Shanghai index as reflecting global conditions of the largest population on the planet. As we finish 2013, both of the Baltic & Shanghai find themselves at key price points that could say much about where they might be a year from now.

Noise or important message? If one uses these two to guide positions in the S&P 500 over the past couple of years, they come closer to being noise than substance.  A breakout from these key resistance lines could be a positive global indicator. We will see if these two happen to breakout and what impact they might have on portfolio construction and lagging commodity performance in 2014.

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