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U.S.-Listed Shipping Stocks Fall Ahead Of Federal Reserve Meeting

John Konrad
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July 6, 2022

by John Konrad (gCaptain) Today shares of most shipping stocks are lower despite the market being mostly flat ahead of the important US Federal Reserve minutes release this afternoon. The fall comes as recession fears are mounting on Wall Street and despite both Europe’s need for more ships and increases in port congestion.

This fall follows yesterday’s market action when oil & gas were hit hard with oil closing down almost 10%. Bond yields fell. Copper and many other commodities came under heavy selling pressure signaling to some analysts that inflation could be peaking.

Tanker companies are leading the march lower with product tanker company TORM ($TRMD) dropping 8.5% at the time of writing and Frontline ($FRO), which operates a large fleet of crude oil tankers, was down 6.5%. Teekay Tankers ($TNK) dropped 8.16%.

Most of the major tanker companies listed in the United States – including Frontline, Torm, Scorpio Tankers ($STNG), Nordic American Tankers ($NAT), and International Seaways ($INSW) – are all down more than 20% since making new highs in May and June.

Some shipping segments are fairing worse. The Breakwave Dry Bulk Shipping ETF ($BDRY), which holds a portfolio of near-dated freight futures contracts on dry bulk indices, reached a high of $42 in and is now selling for $15.02, a drop of over 65%. Eagle Bulk Shipping ($EGLE) is down almost half since making new one-year highs early June. Navios Maritime Holdings ($NM) closed above $6.50 in October and is now trading for just $2.02.

Cruise lines are also having a rough day with Norwegian Cruise Line Holdings ($NCLH) falling the most with a 7% drop. Carnival ($CCL), Norwegian, and Royal Caribbean ($RCL) are all approaching 2020 COVID-19 lows as they struggle to pay off debt and as fears of a global recession mount.

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