Wells sounds cautious tone on dry bulk rally

|By:, SA News Editor

Wells Fargo becomes the latest firm to call a near-term top in the Capesize-fueled dry bulk rally. (See Deutsche)

"After rising ~290% since 8/19 to $42,211/day, Capesize spot rates have declined ~10% to $38,023/day since Wednesday," analyst Michael Webber notes, adding that "despite the modest pull back ... rates remain ~235% above their Q2 average [and] 35% above Q4 forward agreements, which are off ~11% since Wednesday, while 2014/2015 FFAs are ~50-60% below spot rates."

Diana Shipping (DSX), Eagle Bulk Shipping (EGLE), and Genco Shipping (GNK) are all maintained at Underperform.

Other names in the sector: FREE, SINO, DRYS, BALT, PRGN, ULTR, NM, SB, SFL, NMM, SBLK