Ten metrics to help understand global markets

Recent upheaval in global financial markets has showcased the uncertainty that still exists over when economies will return to normal.

In last week’s blog, we examined Ursa Space data for insights, focusing on crude oil inventory measurements and automobile manufacturing activity indices.

Let’s continue down the same path, drawing on examples of Ursa’s satellite imagery-derived data to better understand the state of the global economy.

We’re monitoring a range of sectors using satellite-based, synthetic aperture radar (SAR), which provides all-weather, day/night capabilities.

Here’s a quick look at 10 metrics representing the market areas of auto manufacturing, cold storage, oil & gas drilling, industrial rail, oil inventories and online retail.   

Figure 1 captures how each metric in its current state compares to where it was 1 month ago, 3 months ago and 1 year ago. Is it roughly higher, lower or the same? 

And what does that mean for economic sentiment? The color refers to the market implication being bullish (green), bearish (red) or neutral (white).

Figure 1

Figure 1

India Auto Manufacturing Index

India’s auto manufacturing index has declined continuously since early April, a sign of significant operational problems likely caused by the coronavirus pandemic. India has the second-highest number of COVID-19 cases in the world. A surge in cases in this country of 1.3 billion people will also keep a lid on commodity demand. 

Brazil Auto Manufacturing Index

While India has overtaken Brazil for second place on the list of countries with the most COVID-19 cases, Brazil remains in the top three. Similar to India, Brazil’s auto manufacturing has fallen steadily since April, with no sign of a rebound. With more than 200 million people, troubles with Brazil’s population can also drag global markets lower.

Tesla Auto Manufacturing Index

With its share price up almost 400% in 2020, Tesla stock has soared, especially after Q2 results beat analyst expectations. Our Tesla index—which captures activity at the company’s plants in the San Francisco Bay Area and Shanghai—captured the uptick in Q2 ahead of quarterly earnings. The index has consolidated higher in Q3, and remains well-above year-ago levels. 

Tesla manufacturing facility in Fremont, California

Tesla manufacturing facility in Fremont, California

Europe Auto Manufacturing Index

Europe’s auto manufacturing index avoided sharp declines in 2020, with the exception of a seasonal slowdown in August. Pockets of strength helped offset weakness elsewhere. That could change as another wave of COVID-19 cases spreads across the continent, including the likes of Germany, where caseloads stayed relatively low during the spring onslaught.

Port of Oakland Cold Storage

The Port of Oakland is the US’s largest exporter of refrigerated cargo containers, and a major conduit for exports of beef and pork to Asia. China imported a record volume of pork in July after an outbreak of swine fever decimated domestic supply. Our index, which tracks activity at the cold storage warehouse in the Port of Oakland, increased in July-August, recovering some of the ground lost in the spring when Asian demand ebbed.

Amazon Fulfillment Centers

The e-commerce giant’s stock price has been setting record highs this year, topping $3,000 in July and $3,500 in September, reaping the benefits of the move toward online shopping. Our monitoring of Amazon’s US fulfillment centers shows strong activity in 2020, with the index remaining higher than in previous years (Figure 2).

Figure 2

Figure 2

Permian Basin Equipment Yards  

A historic fall in oil prices eliminated 100,000 jobs in the oilfield services after the number of active rigs dropped to all-time lows for 15 weeks. Oil prices have partly recovered, leading some crews to return. In the Permian Basin, our monitoring of nearby equipment yards—where idle equipment is stored—shows a slight decline in September versus a few months ago (Figure 3). That implies some drilling equipment is being dispatched back to the field. 

Figure 3

Figure 3

Caribbean Crude Inventories  

More than a vacation spot, the Caribbean is central to the global oil market, as barrels often end up here in storage. Whether the region’s inventories are rising or falling says a lot about the global supply-demand balance. Even though Caribbean inventories are below a July peak, they remain 67% higher than a year ago. There is still a long way to go before inventories accumulated since the spring are burned off.

St Croix, US Virgin Islands

St Croix, US Virgin Islands

China Crude Inventories

China’s crude inventories ballooned May-August on record-high imports. The buying spree helped strengthen oil demand, but have raised concerns about what will come next if imports slow. Does China view current oil prices as low enough to incentivize more stockpiling? Our data show capacity utilization approaching upper technical limits at certain locations, though plenty of storage options still exist.

Chicago Class-1 Rail

Industrial rail activity can serve as a proxy for the economy, revealing the impact of subtle shifts in economic conditions before other statistical data. We’re monitoring the US’s largest freight hub, Chicago. The Chicago Class-1 rail index rose starting late June, and since then has stayed higher, on par with year-ago levels. 

Check back here for more updates on how satellite imagery data can reveal insights about the state of the global economy.

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Geoffrey Craig