Two Stories for One Truth

Tanker rates start to look better, and HUNT has been able to sell two 2019 DSME VLCC at a high price, sometimes a pre requisite for a market rally in the tanker names. The time is ripe: Q4 Winter restocking season and deep value metrics. Fright container rates are up 100% and dry bulk rates are sky high year to date. The trade with China is as good as during a normal year. Yet the stock market does not believe it. 2020 bulkers is down 32% ytd, MAERSK below 2017 levels and up 13% ytd or EURONAV down over 30% ytd at 0.7 times book.

The same story is told by Oil stocks. Although both Brent and WTI recovered 100% from the lows at least, the MSCI World Energy is down over 48%.

Are we missing something? Is the deep value of most oil related stocks going to be a trap or an opportunity? It is encouraging to see that despite big swings in the oil price lately, most oil related equities have exhausted their potential to go down.

It shall be interesting during these three CAPITAL LINK days to try to figure out who is right: the economy or the market.