It took some digging, but we did it. Amid all the horrible economic data, the gloomy holiday retail sales numbers and the dreadful corporate profits forecasts, we found some positive news.
Perhaps positive is too strong a word. But at this rate, we'll settle for less bad.
It wasn't just one piece of less bad news, either. We found several. So, in the interest of countering the steady flow of depressing information (much of it duly reported in this column), we now present five reasons the world may not be hurtling over a cliff after all.
The Baltic Dry Index is rising
This obscure index, which measures the cost of transporting commodities on ocean vessels, plunged 92 per cent last year as the global economy hit the wall. But it's gained nearly 24 per cent since early December, including a 4.1-per-cent advance yesterday.
"There's definitely an increase in the amount of movements of iron ore and coal," Philippe van den Abeele, manager of shipping hedge fund Castalia Fund Management (U.K.) Ltd., told Bloomberg.
Somebody must be buying the stuff.
Investment managers are optimistic
On average, institutional fund managers expect Canada's benchmark stock index to rise 10 per cent this year, according to a survey by Mercer. And they see oil prices heading back to $60 (U.S.) a barrel by the end of 2009, which can only help our stock market.
"The expectation of positive returns is tempered by pessimism regarding a full market rebound," Mercer said. "Almost all managers (just under 90 per cent) believe that it will take at least three years for the S&P/TSX to reach its former high" of 15,073.13.
That's okay. We can be patient.
Companies are still raising dividends
True, the fourth quarter was the worst in more than half a century for U.S. dividend cuts. But financials accounted for the vast majority of the 288 dividend reductions, which were still outnumbered by the 475 companies that raised dividends.
In December, companies that boosted their payouts included AT&T, Boeing, Eli Lilly, Nucor, Fortis (the Canadian utility, not the European bank that was bailed out last fall) and Enbridge.
"Dividend growth will be lower in 2009. Think single digit at the most. Rejoice, though, as this is more than the zero increase [in income]provided by bonds," dividend growth guru Tom Connolly said in the latest issue of the Connolly Report newsletter.
Even junk bonds are finding buyers
After plunging last year, prices for high-yield bonds rebounded about 8 per cent in the final two weeks of 2008 as investors bet that the decline was overdone. Even after the bounce, junk bond prices are still implying a 20-per-cent default rate, which strikes some investors as excessive.
Lower fuel costs, the addition of higher-quality companies to the junk bond class (by virtue of debt downgrades) and a "general hunger for yield are drawing fresh money" into the sector, fund-tracking firm EPFR Global said in a report.
Stocks are rising - a lot, actually
Canada's benchmark stock index gained another 100 points yesterday, notching its seventh win in eight sessions, as investors bought gold, financials and energy shares. From its low in November, the index has gained nearly 1,500 points or just shy of 20 per cent.
In highlighting a few positives, we don't mean to sugar-coat the economic problems that will almost certainly worsen in coming months. There is much pain ahead. But there is hope, too.