Screenshot taken of shipping sector stocks at around 11am EST on 1July22

Analyst Calls Today “Bloody Friday” For Shipping Stocks

John Konrad
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July 1, 2022

by John Konrad (gCaptain) Shipping stocks across the board took heavy hits today in what shipping analyst J.Mintzmyer is calling “Bloody Friday.” This fall comes with fears of a global recession after a US government report showed manufacturing activity weakening in June to a two-year low.

It’s been a difficult few weeks for shipping stocks. gCaptain reported on Tuesday that shares of product tankers were among the few industry segments holding up well despite an overall fall in the shipping market over the past few weeks. We wrote that Scorpio Tankers $STNG was up 165% since the beginning of 2022, Ardmore Shipping $ASC up 105%, TORM $TRMD up 71%… but each has fallen more than 10% since Tuesday’s highs.

The next day cruise ship stocks crashed.

On Wednesday shares of Carnival Cruise Lines $CCL fell more than 15% in early morning trading to near its 2020 COVID-19 low after a banker/analyst at Morgan Stanley warned that the company’s debt load, rising costs, and a possible recession could, in a “worst-case scenario”, send Carnival shares to zero.

Today many of Wall Street analysts’ favorite shipping stocks dropped with container and bulk stocks falling the most. Recent favorites like Zim Integrated Shipping $ZIM (down 9.5% at time of writing), Genco Shipping $GNK (down 8.5%), and Eagle Bulk Shipping $EGLE (down 8.46%).

One reason for the fall could be that a key measure of US manufacturing activity weakened in June to a two-year low as new orders contracted, restrained by lingering supply constraints and some softening in demand.

“The Institute for Supply Management’s gauge decreased to 53 last month from 56.1 in May, according to data released Friday. Readings above 50 indicate expansion,” said Bloomberg news about the manufacturing report that sent markets lower. “The figure was weaker than most economists’ estimates in a Bloomberg survey, which had a median projection of 54.5.”

The group’s index of new orders dropped nearly 6 points to 49.2, the poorest result since May 2020, when the economy was digging its way out of the pandemic-induced recession.

The only maritime winners we found today were relatively small digital plays like maritime and satellite data provider Spire Global $SPIR which was up almost 10%.

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