Commodities, Copper, Even Baltic Index Suggest That Global Economic Activity Is Coming Back

The Dow Jones-AIG Commodity Index is a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities (e.g. natural gas, live cattle, wheat, copper, silver, cotton, etc., see the full list and current weights here and see the chart above) and was launched on July 14th, 1998.

Blogging maven and fellow chartaholic Scott Grannis has been regularly graphing and reporting on commodity prices over the last six months, particularly copper, because he says that “Commodity prices are an excellent way of keeping tabs in real time on the progress of the global economy.”

Here’s a chart below of the Dow-Jones AIG Commodity Index back to 2007 (in semi-log format a la Scott), showing that the commodity price index reached a one-year high yesterday, closing at the highest level since October 14, 2008.

The one-year high for the commodity price index indicates that global commerce and economic activity are rebounding from the early 2009 lows, and that a global economic recovery is well under way, especially considering the other recent positive reports on global economic activity picking up. Even the Baltic Dry Index is showing some signs of life again, closing above 3,000 today for the first time since early August.

Subscribe by RSS Subscribe by Email