It is becoming constantly clear that the main, if not sole, drivers of the shipping market currently are factors relating to the well known issues of Covid pandemic and the prospects over a vaccine, the US leadership transition following the elections on November 3rd, and the ever changing trade and geopolitical balances or relationships across the globe. So what the shipping stocks are going to reflect in the coming weeks will not be related to the intrinsic fundamentals that have to do with the industry itself and the sector’s companies such as the level of financial performance due to the deployed strategies by each player, the demand or supply dynamics of the vessel market, and the developments in the SnP market, among other things.
Instead, attention is clearly focused on the bigger picture meaning the broader landscape as it is the case for many other sectors of the global economy as well. Of course for investors it is good to know how shipping companies will be trying to confront this ongoing crisis and uncertainty based on each company’s individual performance, financial strengths, cost strategy, and other means of action, but again it does not matter so much since the systematic risk is now of greater importance and attracts overwhelming attention.
The external factors which continue to determine the expectations around the shipping market and its stocks will demonstrate even higher volatility going forward as the economies will have to endure a difficult fourth quarter in the current year and perhaps an even tougher first quarter in next year because of the pandemic. And all these will be played out at the center stage of the global attention before more substance can be provided in terms of any deceleration in this pandemic due to a ready to use vaccine, which appears to be on its way.
On the political front the blurred picture of the post-US election politics, if persists, adds further tone of uncertainty and further perplexes the leaderships worldwide in their economic and political planning. The same goes with the front of trade developments as the latest news concerning EU’s intention to retaliate with tariffs against the US underlines that there is a long road ahead for more quite or normal relations to be established, meaning without confrontations which the equity markets don’t really like.