General Market Review
In early August US-recession fears have resurfaced as softer-than-expected economic growth data was followed by a weak employment report. As the Bank of Japan (BoJ) has decided to raise its key benchmark rate the Japanese Yen continued to increase against the US-Dollar thereby forcing Investors to unwind their FX carry-trade positions. This has led to an 8%-correction of the S&P500 in the beginning of the month. Subsequently, better than expected economic data led to a V-shaped turnaround offsetting losses entirely in the larger cap stock market segments. Defensive stocks were still resilient throughout the month whereas cyclical stock market sectors have shown a significant underperformance.
The Bank of England (BoE) cut its key interest rate from 5.25% to 5%, which was the first rate cut after the hiking cycle that began in December 2021. Otherwise, market participants followed the statements made by global central bankers at the renowned annual meeting in Jackson Hole. FED-chair Powell has reaffirmed markets that interest rate cuts were imminent as the labor market has cooled considerably.
US economic data was weaker as non-farm payrolls increased by only +114k in July from +206k in June. The unemployment rate rose from 4.1% in June to 4.3% in July still following a slightly increasing trend for a few months now.
In the Eurozone unemployment rates was stable at 6.4% from 6.5% in the prior month.
In the US, consumer price inflation further continued to decrease as headline inflation was at +2.9% (y-o-y) and core inflation at +3.2% (y-o-y) for the month of July versus previous readings of +3.0% and +3.3%.
In the Eurozone, consumer price inflation figures in July came in unchanged as headline inflation was again at +2.6% and core inflation at +2.9% (June revised: +2.9%).
US 10-year treasury yields decreased from 4.0% to 3.9% at the end of August, whereas 10 year-German government yields remained at 2.3%.
The MSCI World Index rose by +2.6% (USD den.) and the MSCI Europe Index increased by +1.6% (EUR den.).
Energy and Transportation
The price of Brent oil fell from $ 80.7 to $ 78.8 at the end of the month. Despite ongoing tensions in the Middle East market participants have downplayed political risks as there has been no major supply disruption. As investors became more concerned about the potential demand outlook for oil the Stoxx 600 Oil & Gas Index (Euro denom.) fell by -3%
On the other hand, the S&P Global Clean Energy Sector Index was able to partly recover from the previous month losses. The index increased by +1.4% in August. With that the renewable energy segment is still down by -7.5% year-to-date.
Transportation segments were mixed during the month. The DJ Transportation Average Index was flat at the end of the month. The aviation segment was weak. Within the airline segment airfares are expected to fall in the winter season. At the same time labor costs continue to be a headwind. The US Global Jets Index dropped by -2.0%.
The Russell 2000 Marine Transportation Index has decreased by -3.3%. Freight rates have been mixed. Despite the ongoing disruptions in the Red Sea container freight fell by -11% in the month of August. The SCFI (Shanghai Containerized Freight Index) is now up by +187% year-on-year. Crude oil tanker (VLCC – Very Large Crude Carrier) rates have decreased from $25k/day to $ 14k/day at month end, whereas product tanker rates (MR earnings) have softened further from $27.4k/day to $ 22k/day. VLGC (Very Large Gas Carrier) rates have increased from $31.9k/day to $ 51k/day at month-end and Capesize-Rates have increased solidly from $20k /day to $25k/day.
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 -2,1%. Long positions in the crude/product/chemical, dry-bulk as well as offshore-supply segment contributed a negative -1.1%, -0.4% and -0.7% respectively. On the other hand, the short shipping book in the container and LPG segment had a neutral contribution of -0.3 and +0,3% respectively.
In the area of freight services, the short book had a positive contribution of +0.1% whereas long positions in other transportation segments had a negative contribution of -0.2%. On the other hand, long positions in aircraft manufacturing and financing had a positive contribution of +0.6%.
Within the energy segment the long book in the utility sector had a positive impact of +0.5%. Long positions in the oil & gas and oil services segment had a negative contribution of -2.3% and the short book has added + 0,2%. Additionally, the fund’s short position in other energy segments had a positive contribution of +0.8%.
The fund’s long position in the LNG infrastructure company New Fortress Energy had the largest security specific performance impact of -1.2%. NFE had reported its Q2 earnings. Due to an early termination of power supply contract in Puerto Rico and ongoing project delays NFE will miss its earnings guidance for the year.
Overall hedging positions via short index futures have contributed negatively by ca. -0.1 % to the overall performance result.
For more information, you can find our latest Factsheet – August 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