Baltic freight rates continue to power higher, the ETF “SEA” has made a multi-week high and is now outperforming the Dow & S&P 500. This is not the sort of behavior that one would expect if the world economy was continuing to fall into the abyss. We have been referencing the upturn in Baltic shipping indices since the start of this year and also noting the outperformance of shipping stocks for the last month. We argue that if you want to know what is happening in the world economy you don’t have to look much further than what is happening on the high seas (we hope for obvious reasons). We are very attracted to shipping stocks not only because of their technical setups and the confirming behavior of commodity indices like the CRB, but also because of their fundamental valuations. The shipping sector is one of the cheapest of the S&P Super Composite sectors. Take a look at the valuations and charts via FINVIZ.com
