Consumer Confidence Disappoints, Shipping Stocks Suffer
As I highlighted in my
column on TheStreet.com on Monday shipping stocks will be highly susceptible to any major economic data news impacting market's views on the long-term outlook. This mornings consumer confidence number was proof of that, tumbling to 49.3 compared to 54.8 last month. Both the present situation index and the future situation index declined. Most of the recent gains stemmed from increases in the future situation component, which fell to 65.5 from 71.5 last month. The present situation index slid to 24.8 from 29.7. The drop was likely fostered concerns over business conditions and the employment situation.
Recently high betas in the shipping sector toward macro data are rooted in the hope that once Chinese demand begins to diminish for dry bulk goods, increases in ex-China demand will offset, or even more than offset, the decline in Chinese imports. But, in order for this to occur it needs to be clear that the global economy, especially the US, are on the road to recovery. Any data supporting or opposing this view will significantly impact trading in the shipping sector Nevertheless, today's data may give Thursday's crucial payroll numbers even more ammunition in the event of an upward or downward surprise.
In other news the Case Schiller Home Price Index came in slightly above analyst's expectations showing a decline of only 18.1%.
Shipping and Mining Stocks
Source: Google (12:42PM)
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