General Market Review
In June, global stock markets rose, mostly led by US mega tech names. Excluding the US global stock markets were flat. On the other hand, in Europe stock markets have declined, particularly in France, where Emanuel Macron has decided to call out snap elections after he has lost support during the European elections.
US economic data has remained robust. The number of non-farm payrolls reached a high of +272k in May, which was an increase from +165k in April. Private sector employment rose by +229k, which was up from +158k in April.
US 10-year treasury yields decreased from 4.5% to 4.4% at the end of June, whereas 10 year-German government yields decreased from 2.65% to 2.5%.
In the US, consumer price inflation continued to cool. Headline inflation was at +3.3% (y-o-y) and core inflation at +3.4% (y-o-y) for the month of May versus previous readings of +3.4% (headline) and +3.6% (headline).
In the Euro-area, consumer price inflation figures in May came in slightly higher at +2.4% (headline) and +2.9% (core inflation). As Euro-Area inflation rates have already reached a moderate level the European Central Bank was able to cut its deposit rate by -25 bps to 3.75%.
In this environment, the MSCI World Index was able to gain by +2% (USD den.), while the MSCI Europe Index exhibited a decline of -1% (EUR den.).
Energy and Transportation
In the first half of the month the price of Brent oil fell from $ 81.6 to below $ 80 per barrel. In the second half of the month oil prices increased on worries of escalating tensions between Israel and the Iran backed Hezbollah. Brent oil closed the month at $ 86.4. As the oil and gas stock market sector was lagging the oil price recovery the Stoxx 600 Oil and Gas Index (EURO denom.) fell by -2.3 % in June.
On the other hand, the renewable energy sector gave up its gains from the previous month. The S&P Global Clean Energy Sector Index dropped by -9.9% in June. With that the renewable energy segment is still down by -14.3% year-to-date.
Transportation segments were mixed during the month. The DJ Transportation Average Index gained by a moderate +1.3%. In the freight services sector FedEx has reported earnings for the quarter ending in May 2024 which were stronger than expected. Moreover, capital spending plans were reduced, and additional share repurchases were announced. On the other hand, both the airline as well as the shipping segments were weak. The US Global Jets Index dropped by -1.6%.
The Russell 2000 Marine Transportation Index has decreased by-2.86%. Shipping stocks came under pressure in the first half of the month as a potential peace agreement between the Hamas and the Israeli government has been discussed. A peace agreement may potentially lead to a normalization of the Red Sea shipping traffic. Despite this, container freight rates have increased even further by +22% in the month of June. The SCFI (Shanghai Containerized Freight Index) is now up by +290% year-on-year. Crude oil tanker (VLCC – Very Large Crude Carrier) rates have softened to $18k/day at month end, whereas product tanker rates (MR earnings) have softened from $47.5k/day to $ 42.5k/day at month end. VLGC (Very Large Gas Carrier) rates have decreased from $72.5k to $ 48.7k at month-end. Freight rates in the LPG sector have eased somewhat as the Panama Canal Authority was able to raise the number of daily transits.
Fund Performance
The fund performance of both the USD as well as EUR denominated share classes were negative.
Within transportation the shipping long book had an overall negative contribution of -1,1%. Long positions in the crude/product/chemical, dry-bulk as well as offshore-supply segment contributed a negative -0,5%, -0.5% and -0.1% respectively. On the other hand, the short shipping book in the container and LPG segment had a contribution of -0.4 and +0,8% respectively.
In the area of freight services, the short book had a positive contribution of -0.4% whereas short positions in other transportation segments had a negative contribution of -1.2%. The aviation long and short book was neutral.
Within the energy segment the fund’s exposure to French assets had a negative impact. Long positions in the oil & gas segment had a negative contribution of -0.3% and the short book has added a small + 0,05%. In addition, a long exposure in the utility segment had a negative contribution of -0.35% given its exposure to the French utility market. Additionally, the fund’s long exposure in the renewable energy sector had a negative impact of -0.65%.
Overall hedging positions via short index futures have contributed negatively by ca. -0.2 % to the overall performance result.
For more information, you can find our latest Factsheet – June 2024.
Seahawk Investments GmbH
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Foreign Exchange Fluctuations may have a negative impact on performance results.
Please note that the information from Lipper Leaders relates to the previous month. All rights reserved. Lipper Leaders – © 2024 Lipper Lipper Leaders Ranking Criteria – Ratings from 1 (low) to 5 (high) First Number = Total Return; Second Number = Consistent Return; Third Number = Preservation; Fourth Number = Expense