General Market Review
In a nutshell sentiment was constructive in August as both equity and credit markets performed well. In the second half of the month – ahead of the Jackson Hole Economic Symposium – the momentum has slowed a bit as equities traded sideways. Investors became increasingly concerned over the global growth outlook amid softer US macro-economic data. Hence market participants fled into gold and other inflation-resistant instruments. The gold price surged by around 4.8% in August. Apart from a more cautious investor stance, US markets posted record highs again and the S&P500 ended the month with a gain of +1.9%.
During the course of the month, the Bank of England (BoE) surprised the markets by trimming its policy rate from 4.25% to 4%, even as inflation edged up by 3.8% year-on-year, thereby prioritizing growth concerns over potential inflationary pressure. Apart from that FED chairman Powell held its last official Jackson Hole press conference, indicating that the FED is open to a rate cut as the US labour market is showing signs of weakness. This was in contrast to the Chairman’s previous statements he had made in the last several months. With these clearly dovish comments the market has moved into a transition phase from rate-hike anxiety to rate-cut optimism. As of August 29, the market was pricing in a 55% and 80% probability of a rate cut in October and December, respectively.
In the US, the labour market was weaker as non-farm payrolls increased only by +73k in July from +147k in June. The unemployment rate was slightly higher at 4.2% in July. In the Eurozone, the unemployment rate was unchanged at 6.2%. In the US, consumer price inflation for the month of July was unchanged versus the prior month. Headline inflation has increased by +2.7% (y-o-y) but core inflation (excluding energy and food) came in higher at +3.1% (y-o-y). In the Eurozone, consumer price inflation for the month of July were unchanged versus the prior month. Headline inflation has increased by +2.0% and core-inflation has increased by +2.3%.
US 10-year treasury yields decreased by 14 Bp from 4.37% to 4.23%. whereas German 10-year bund yields have increased by 2 Bp from 2.70% to 2.72%.
The MSCI World Index increased by +2.61% (USD den.) and the MSCI Europe Index rose by +1.15% (EUR den.).
Energy and Transportation
Oil prices (Brent) slipped back to $ 68 per barrel from $ 73 at the end of last month. The International Energy Agency warned that a surge in global oil production would collide with weakening demand in the last quarter of the year. The IEA cut its forecast for global demand by 680k barrel/day for global demand growth this year. The agency said that geopolitical uncertainty continues to weigh on the market. Countries facing higher tariff threats such as China, India and Brazil would consume less oil than originally forecasted. On the other hand, the OPEC oil cartel continues to lift production. Oil supply is expected to grow by 2.5mn barrel per day in 2025.
In a weakening oil market, the Stoxx 600 Oil and Gas Index was still up by a moderate +1,0% (EUR den.) at month end.
In a generally positive market environment, the Dow Jones Transportation Average Index (USD) increased by +3.5%. The aviation subsegment took the lead followed by the Marine Transportation Segment. The US Global Jets (USD) Index was up by +9.9%. The three large full-service carriers in the US, United Airlines, American Airlines, and Delta Airlines surged as Spirit Airlines filed a “going concern” warning with the SEC. If Spirit exits the market, it could potentially remove competition in the market. The situation’s final outcome is not yet determined. Within the shipping segment tanker stocks have performed strongly during the months, whereas container stocks were mostly weak.
VLCC-rates (Very Large Crude Tanker) have increased from $18k/day to $ 46k/day at month end. In the container segment the Shanghai Containerized Freight Index (SCFI) fell another -7% month-on month and -38% year-on-year. Capesize rates in the dry-bulk-segment have remained at elevated levels of around $ 25k/day.
Fund Performance
The fund performance of both the USD and EUR denominated share classes was positive.
During the month several shipping companies have reported their earnings. Given the subdued outlook in the container shipping sector short interest in Maersk’s common stock has increased to ca. 40% of the available free float before Maersk reported its quarterly earnings on the 7th of August 25. Ahead of Maersk’s earnings release on the 5th of August the fund’s short exposure in Maersk’s common stock was cut by 2/3 to 1.9% of NAV at share price of DKK 13,096. At the same time, the fund’s short positions in the container liner company ZIM and freight forwarder DSV AS were doubled. At a share price of $ 15.86 the short position in ZIM was increased from 1.5% of NAV to 3.0% of NAV and the short position in DSV was increased from 1% of NAV to 2% of NAV at a price of DKK 1443 /share. After the Q2 earnings release of Maersk, where the company has reported strong earnings and raised its operating profit outlook for the year to between $2-3.5bn., a short squeeze has led to a share price increase of +12.5% in the subsequent two trading sessions. On the other hand, container liner company ZIM had reported earnings on the 20th of August, and earnings fell short of estimates. The share prices fell by ca. -12.5% towards the end of the month. In the crude tanker segment a temporary weakness in the Frontline share price was used to double the fund’s long position. On the 11th of August the position was increased from 3.5% of NAV to 7.0% of NAV at a share price of $ 18.9. Within the dry bulk segment, the long position in Genco Shipping was sold at an avg. price $ 16.6 towards the end of the month. Given Genco’s low leverage of its balance sheet management has announced that it may pursue growth opportunities which could lead to new vessel acquisitions. In the renewable energy sector, a new long position in Vestas was built up at an average share price of DKK 133,0, thereby increasing the renewable energy exposure by 2.5% of NAV.
The fund’s month end performance attribution was as follows. Within the shipping equity segment both long and short book had a positive contribution of +4.1% and +0.4%, respectively. Long positions in the crude/product, dry-bulk and offshore supply segments contributed +1.6%, +0,8% and +1,7% respectively. Short positions in the container segment contributed +0.4%. In the long book the strongest performers were Tidewater and Frontline. On the other hand, short positions in the freight services segment contributed a negative -0.1%. The long and short book in other transportation sectors including aviation was mixed with a performance of +1.0% and -1.5% respectively.
Within the energy segment, long positions in the oil and gas and the oil services segment had a positive contribution of +1.4% whereas short position had a negative contribution of -0.3%. Long positions in the renewable energy segment have contributed +0.1. Overall hedging positions via short index futures had a negative effect of -0.1%.
For more information, you can find our latest Factsheet – August 2025.
Seahawk Investments GmbH
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