 Dear Reader, When we're trying to forecast the depth and timing of the coming recession, leading indicators are a key part of any analysis. I’ve found a way to sidestep the timing aspect. I’ll explain more in just a moment. But it doesn’t hurt to learn more about what’s going on in the economy, especially if it might help us better prepare and profit. So I’d like to introduce you to a leading indicator you might be unfamiliar with: the Baltic Dry Index (BDI). The BDI is all about international cargo shipping. It’s calculated by assessing multiple shipping rates across more than 20 routes. Few investors are aware of the correlations it often reveals. First, here’s what it is: the BDI measures bulk cargo supply and demand, meaning basic essentials such as iron ore, lumber, coal, grain, and other raw materials. Raw materials demand is a pretty good predictor of future industrial production and ultimately economic growth. After all, you can’t build anything made of steel without receiving iron ore and met coal deliveries first. So an expanding or contracting BDI is considered a leading indicator of economic activity. Did you know that the BDI is known to have predicted the 2008 recession when the prices of key commodities in the index suddenly dropped? That’s because the BDI has been shown to correlate with stock market indices including the S&P 500. That’s largely been true for the last few years—except January and February 2019. That’s when the BDI dropped hard but the S&P didn’t. See for yourself: 
There’s another point to note on that chart. The BDI hasn’t come close to reaching its old highs like the S&P. Is that a suggestion that we’re going to see a lot less demand for bulk cargo and raw materials going forward? After all, when you’re seeing headlines like these in the news: - The Dow Plunges 370 Points Because Recession Fears and Tariffs Make a Bad Mix (Barron's)
- Global Recession Fear Is Suddenly Stalking the Credit Market (Bloomberg)
- US Treasury yields tick higher amid recession fears (CNBC)
… then it’s hard NOT to be a bit concerned. That leads us to the question of when the recession will start to bite hard. Are we looking at the 12- to 18-month window I’m expecting… or will it be earlier, as the BDI is hinting? I have a solution that addresses the timing issue. My All-Weather Income Strategy Summit will be revealing the sector (and a high-yield, low-risk stock pick in that sector) that outperforms before and during the recession. Timing is no longer a problem. This sector does well whether the recession’s officially begun (or not). The secret is the very special once-in-a decade tripwire that’s been activated. That’s the green light for this overlooked sector to start delivering exceptional results—now… for the next 12–18 months… and beyond. I’m giving away much more than the sector’s identity, background, and ticker of the stock I’ve picked for you, of course. You’ll also have a real plan to handle anything the recession throws at you. You’ll be totally prepared! Reserve your All-Weather Income Strategy Summit seat. My All-Weather Income Strategy is designed to make the recession as worry-free—and as profitable—as possible. I hope you’ll join me on June 24 when I reveal what I’ve been researching for the last several months. Until next time, 
Robert Ross
Senior Equity Analyst
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