Trade War Distortions?

I have found myself writing the phrase “trade war distortions” on multiple occasions because I personally cannot see how anyone can quantify the effects of the Trump/China standoff, economically.

In NFTRH we have tracked the crash in the Baltic Dry global shipping cost index as a negative divergence to global markets and commodities since Q4 2018.

baltic dry index

In a couple of posts on Monday we noted the tanking GDPNow forecast (and partial bounce back).

In NFTRH 540 we reviewed the drops in both the New York Fed and Philly Fed manufacturing surveys and on and on it goes. So many US and global global indicators showed a cliff dive in or as a result of Q4 2018.

Callum Thomas adds another in the form of a big drop in Emerging Market Import Volumes.

Emerging Market Imports Crash

Frankly, I almost find it hard to believe – usually when I see a move this stark my BS detector lights up like a Christmas tree, because there could be an issue with the data…   I’ll leave you with that caveat as I go away to dig through the data and my various other source to confirm/deny.

Needless to say if this data is correct (and also not just a one-off blip) then it paints a bleak picture.

Well Callum, I don’t think your data are wrong. It could be just a one-off blip along with all the other cliff dives, but it’s in line with a lot of other readings out there, post-Q4. The question now is “real or Memorex?” and it appears that Doctor Copper and other macro Ph.D.s are working on the answer.

emerging markets

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