The shipping industry has recently experienced unprecedented levels of profitability, thanks to soaring freight rates which have driven margins to new heights. With additional cash reserves, many players have seized the opportunity to invest heavily in supply-side infrastructure, and as a result, the merchant fleet is set to reach historic capacities in the coming years. However, as the global economic outlook indicates tough times, can demand keep up?
After times of rapidly rising policy rates across the globe, bonds have become more attractive again and times of “TINA” are over. While Europe has recently faced various challenges, its economy looks more resilient than anticipated. We asked ourselves how investors could profit from this unique environment and conducted research in the fixed income market to detect attractive opportunities.
The Japanese proverb “Money grows on the tree of persistence” accurately describes the country’s monetary policy situation. Unlike other major economies, Japan continues to maintain its loose policy despite rising prices. WUTIS conducted an in-depth analysis of Japan’s economy to gain a better understanding of the macroeconomic environment and identify potential trading opportunities.
Considering the elevated levels of inflation in the Euro-Zone and other economic indicators, the Euro-Area is facing serious threats. Accordingly, the question “which market participants are the most vulnerable to the current market developments” rises. From the trading perspective, it was crucial to us having limited potential losses with regard to the current levels of volatility, but still being able to earn an adequate premia and in result setting up our trading thesis.
During times of uncertainty, investors seek market uncorrelated returns and resort to fundamental value and high-quality equities. We built a portfolio of European value stocks with strong brand reputation and economy-resilient business models from a selective but flexible framework to navigate current market conditions.
In the past months, we noticed an accelerating velocity in US-Mortgage Rates. The housing market experiences significant price appreciation, fuelled by uncertainty. The FED doubling down on a hawkish policy, elevated real estate prices and increasing mortgage costs result in headwinds for Mortgage Lenders.
Raising rates in a broken market? On March 16, the Fed will likely commit to their first rate hike after a swift response of unprecedented measures to the onset of a global crisis in 2020. With current developments, we see signs of stagflation emerging and have discussed its consequences for markets.
Our Team took a closer look into the recent turmoil of the energy market and the impact of the rising political tensions in Eastern Europe. Contrary to the ESG-trend, we expect investments in the Oil & Gas Industry to increase in 2022 as oil refinery producers and equipment manufacturers recovered the 2020 demand gap and the growth outlook remains positive for the coming months.