General Market Review
Global Equities rose modestly during the month of January while long-term interest rates were mostly flat. The US 10-yr government bond yield was unchanged at 3.9% at month end whereas German 10-yr Bunds increased slightly from 2.0% to 2.2%.
In the US, the consumer price index for the month of December came in at +3.4% vs. 3.1% (headline) and +3.9% (core) vs. 4.0% in the previous month. As inflation rates have remained at elevated levels FED chairman Powell has signaled that a rate cut in March may seem premature.
US economic data was resilient. The labor market has shown further strength. Non-farm payrolls and private payrolls increased further by 216k and 164k for the month of December versus a previous reading of 199k and 150k in the previous month, Durable goods orders and capital goods orders (ex-defense) have increased by 0.6% and 0.3% respectively during the month of December.
In Europe, inflation readings were nearly unchanged. The Euro-Area Consumer Price Index came in at 2.9% (headline) and 3.4% (core) which was at the same level as the prior month. The European Central Bank kept interest rates unchanged. The Eurozone Economy registered zero GDP growth in Q4 2023. European economic activity has remained at depressed levels with the Eurozone Manufacturing PMI (Purchasing Manager Index) at 44.7 and the Services PMI at 49.0.
The MSCI World Index gained by +1.2% (USD den.) and the MSCI Europe Index gained by + 1.6% (EUR den.).
Energy and Transportation
Ongoing tensions in the Middle East led to an increase in oil prices towards the end of the month. After three months of subsequent price declines, the price of Brent oil increased from $ 77.0 to $ 81.7 per barrel at the end of the month. Despite this, growing concerns about the global demand outlook for oil have weighed on the entire sector. Moreover, at the end of the month, Saudi Arabia announced that it will not expand the Kingdom’s daily oil production capacity. Therefore, Saudi Aramco had been asked by the energy ministry to abandon a plan to increase its maximum sustainable production capacity from 12mn barrels to 13mn barrels per day.
The Stoxx 600 Oil and Gas Index has lost -3.8 % in January. As optimism concerning future Federal Reserve Rate Cuts has somewhat waned throughout the month the S&P Global Clean Energy Sector has dropped by -10.9%.
With the exception of the shipping sector most transportation segments have recorded a weak performance throughout the month. The Dow Jones Transportation Index dropped by -2.3% whereas the US Global Jets Index fell by -1.7% in the month of January. On the other hand, the Russell 2000 Marine Transportation Index increased by +8.8%.
The dry bulk segment has moderated throughout the month. Capesize-rates fell further from $29k/day to $ 16k/day at month end. Given the ongoing attacks in the Red Sea, container freight rates were strong. The SCFI (Shanghai Containerized Freight Index) increased by another +24% compared to the previous month. The SCFI index is now up by 119% year-on-year. Crude oil tanker (VLCC – Very Large Crude Carrier) rates have further moderated throughout the month with VLCC rates closing at $ 27k/ day at month end, whereas product tanker rates (MR earnings) have shown strength closing the month at $45k/day. VLGC (Very Large Gas Carrier) rates have dropped by -80% from record high levels to$22k/day at month-end.
Fund Performance
The fund performance of the USD share classes was slightly negative whereas the EUR denominated share classes were positive.
Within transportation both the shipping long as well as short book had an overall positive contribution. Positions in the crude and product tanker segments contributed a positive +2.0%. On the other hand, despite the strong fundamentals the long offshore supply vessel exposure had a negative contribution of ca. -0.5%. The short shipping book had a positive contribution of +0.4% with the short LPG segment contributing +0,7% and the short container positions contributing -0.3%.
In the area of freight services, the short book had contributed + 0.3% and short positions in other transportation segments had contributed +3.3%. Moreover, the aviation long book was able to contribute +0.2%,
Within the energy segment long position in the oil & gas as well as oil services sector had a negative contribution of -1.1 % and -1.9% respectively. The long book in the renewable energy segment had contributed a further -1.5%.
Overall hedging positions via short index futures has contributed positively by ca. +0.1% to the overall performance result.
For more information, you can find our latest Fact Sheet – January 2024.
Seahawk Investments GmbH
This document is a customer information (“CI”) within the meaning of the German Securities Trading Act, the “CI” is addressed to natural persons and legal entities with their habitual residence or registered office in Germany and is used exclusively for informational purposes.
This “CI” cannot replace an individual investment- and investor-friendly advice and does not justify a contract or any other obligation or represent any kind of contractual offer. Furthermore, the contents do not constitute investment advice, an individual investment recommendation, an invitation to subscribe for securities or a declaration of intent or a request to conclude a contract for a transaction in financial instruments. Also, it was not written with the intention of providing legal or tax advice. The tax treatment of transactions depends on the personal circumstances of the respective customer and may be subject to future changes. The individual circumstances of the recipient (including the economic and financial situation) were not taken into account in the preparation of the “CI”.
An investment in mentioned financial instruments / investment strategy / financial service involves certain product specific risks – e.g. Market or industry risks and risk in currency, default, liquidity, interest rate and credit – and is not suitable for all investors. Therefore, potential prospects should make an investment decision only after a detailed investment advisory session by a registered investment advisor and after consulting all available sources of information. For further information, please refer to the “Key Investor Information” and the securities prospectus: www.lemanikgroup.com