General Market Review
US shares gained in January but lagged other regions as Chinese start-up DeepSeek challenged US leadership in artificial intelligence (AI). Eurozone shares began 2025 on a strong footing with gains in January outpacing other regions. The eurozone benefited from a rotation out of US tech stocks in January, while worries over trade tariffs eased.
Regarding central bank’s decisions, we saw a continuation of the last months of 2024. The FED meeting at the end of January was a prime example: the elimination of the characterization of ‘progress on inflation’ immediately pushed yields higher. But FED chair Powell clarified in his press conference that no such signal was intended, which brought down yields to a level prior to the FED meeting. He also implied that getting to 2% inflation was not the threshold. Per end of month, market participants priced in roughly two rate cuts for the current year.
Across the pond, the ECB decided to cut its key interest rate by 25 Bp to 2.75% raising the market’s expectation of a full-year policy rate cut of around -0.875% to -1.125% which would bring the key interest rate down to 1.875% by the end of 2025.
In the US, the labour market was stronger as non-farm payrolls increased by +256k in December from +227k in November. The unemployment rate was slightly better than consensus at 4.1% in December. In the Eurozone, the unemployment rate remained stable at 6.3%.
In the US, consumer price inflation for the month of December was in line with consensus and slightly higher than in the prior month. Headline inflation has increased by +2.9% (y-o-y) whereas core inflation (excluding energy and food) came in slightly below consensus at +3.2% (y-o-y).
In the Eurozone, consumer price inflation figures for the month of December came in higher versus the prior month. Headline inflation has increased by +2.4% whereas core-inflation by +2.7% respectively.
US 10-year treasury yields have decreased by -3 bp from 4.57% to 4.54%. On the other side German 10-year bund yields have increased by +9 bp from 2.37% to 2.46%.
The MSCI World Index rose by +3.5% (USD den.) and the MSCI Europe Index by a strong +6.5% (EUR den.).
Energy and Transportation
In January 2025, brent crude oil prices rose from $ 74.6 to above $ 80 per barrel, this increase was mostly driven by tougher US restrictions on Russian and Iranian oil exports, which reduced global supply. However, the market faced downward pressure later in the month due to increased trade tensions between the United States and China. The price of Brent oil dropped to $ 76.7 per barrel at month end.
In this environment the Stoxx 600 Oil & Gas Index (Euro denom.) has increased strongly by +6,4%.
The S&P Global Clean Energy Sector Index was flat at 0.0%. in January.
All Transportation segments were positive, The DJ Transportation Average Index increased by +2.7%. whereas the US Global Jets Index was able to gain by +2,9%.
The Russell 2000 Marine Transportation Segment increased by +4,3%. In the dry-bulk segment Capesize-Rates have decreased further from $ 10k/day to $ 7.5K/day. Container freight rates are down by -17% in the month of January. The SCFI (Shanghai Containerized Freight Index) is down by -6% year-on-year. Crude oil tanker (VLCC – Very Large Crude Carrier) rates increased tom a level of $ 20k/day at the end of last month to $ 37.5k/day, whereas product tanker rates (MR earnings) were range-bound averaging $20k/day. VLGC (Very Large Gas Carrier) rates have decreased from $ 45k/day to $35k/day at the month-end.
Fund Performance
The fund performance of both the USD as well as EUR denominated share classes were positive.
Within transportation the shipping long book had an overall positive contribution of +3,4%. Long positions in the crude/product, dry-bulk and offshore supply segments contributed a positive +2.5%, +0.1%, and +0,8% respectively. On the other hand, the short shipping book had a positive contribution of +0.5%. Short positions in the container and dry bulk segments had a contribution of +0.6% and -0,1% respectively. After a three month sell-off shipping stocks were able to stabilize. Crude tanker rates rose as sanctions on the illicit fleet finally took its toll as Chinese ports became more stringent in not-accepting sanctioned vessels. This has led to a vessel supply shortage.
In the area of freight services, the short book has a positive contribution of +0.4%. On the other hand, long positions in the aviation segment had a positive contribution of +2.2%.
Within the energy segment long positions in the oil & gas and oil services segment had a positive contribution of +0.8% whereas short positions had a negative contribution of -0,5%. The fund’s short position in other energy segments had a positive contribution of +0.1%.
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 – January 2025.
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