Rachel’s note: On Monday, we introduced you to legendary economic forecaster Phil Anderson.
We told you that over the next few weeks, we’ll show you how he has forecast every market move using the cycle the market has followed religiously for over 200 years.
That’s because every 18.6 years, property, economy, and stock markets move through a repeating series of peaks and troughs – like clockwork.
Using this knowledge… Phil didn’t just predict the 2008 crash – he knew with certainty that it would happen.
What’s more… in 2016 he called the stock market highs for 2019, followed by the market panic and short-term recession in 2020…
He also said property would boom following 2020, when American economists were calling for the worst recession since the Great Depression.
Today, he’ll show you more of what the mainstream is missing about why we’re not looking at a recession yet.
By Phil Anderson, editor, Cycles Trading With Phil Anderson
Global trade is booming.
So much so that ports are running out of warehouses.
They need more space to store cargo than ever before. World Property Journal reports:
The industrial and logistics sector has seen historically high demand as companies expand their real estate footprints to keep up with e-commerce sales that have increased 133% over the last five years. It’s anticipated that by 2026, 1.7 to 2.2 billion square feet of additional e-commerce-dedicated logistics space will be required to support internet sales.
E-commerce is driving this spike in demand for warehouse space.
Bullish for the Cycle
Almost two-thirds of all sellers on Amazon are based in China. This means that if you want to have something shipped to your doorstep, it will likely travel across the world.
And in 2022, trade between the U.S. and China reached record levels.
Shipping rates, another measure of trade activity, have improved over the past couple of years.
As the world emerged from the COVID-19 pandemic, shipping rates plummeted. Since its peak in September 2021, the WCI Composite Container Freight Benchmark rate has been down 80%.
And global supply chains are nowhere near as strained as they were during the pandemic.
The Federal Reserve Bank of New York’s Global Supply Chain Pressure Index is down 73%.
One of the reasons supply chains work better… is more warehouses.
Before the pandemic, inventories were a swear word. Everything was delivered just in time.
Now, it’s the opposite. Having ample inventories isn’t considered bad. If demand spikes, buyers won’t see shipping delays.
Global Trade Is Booming
But to have inventories, you need warehouses.
And not just any warehouse will do…
The ones located close to marine ports are some of the most prized assets.
Every mile saved on transporting containers from a port to a warehouse saves money.
Transportation, after all, amounts to 45% to 70% of total logistics costs.
As a result, there’s a frenzy in the warehouse market. Everybody wants access to the warehouses located near ports.
This wave of demand tells me that global trade is booming. It’s flourishing.
There’s no recession in sight.
Regards,
Phil Anderson
Editor, Cycles Trading With Phil Anderson