World's Largest Shipping Company Collapses As Trade War Reality Strikes

While US equity markets (well a few mega-cap tech stocks anyway) have remained resilient in the context of rising protectionist fears, the world's largest shipping company is seeing its stock eviscerated as investor anxiety over trade wars finds an outlet that makes rational sense.

A.P. Moeller-Maersk A/S may struggle to make a profit this year after the U.S. and China descended into a trade war that is already showing stress in sentiment surveys.

As Bloomberg reports, Maersk, which is based in Copenhagen, has already lost almost a third of its market value this year as investors gird for more bad news, and it is losing value in line with the collapse in the US Treasury yield curve.

Trade protectionism means less demand, and history suggests the shipping industry will struggle to make the necessary supply cuts. What’s more, Maersk is now more exposed to shipping as the former conglomerate divests its energy business.

Per Hansen, an investment economist at Nordnet in Copenhagen, says Maersk is currently “in the eye of the hurricane” when it comes to the damage that will be inflicted by a trade war.

The company said earlier in the week it will need to temporarily scale back its service between Asia and North Europe as a result.

“It’s highly likely that Maersk’s valuations could sink to its trough valuations in the coming months as investors avoid shipping stocks until more excess capacity is being removed,” said Corrine Png, chief executive officer and founder of Crucial Perspective, a Singapore-based research provider focusing on transport.

So just keep buying Amazon and Netflix, oh and for good measure, keep buying bonds.

Comments

TeethVillage88s nmewn Sun, 07/15/2018 - 18:57 Permalink

GD, I bought some equities in Gas, Oil, Dry Goods Tankers within last 10 years.  I took losses early... there was industry glut for years... even perhaps before 2007/2009.  Well... I haven't seen the Dividend Paying Ocean Shipping Corporations doing well since like 2009.

- What do we call that?  Industry Collapse.  Today no real reference to old Industry Collapse and ruin of shipping industry.  GD... shipping industry.  Milk industry in Shipping is soft this year!

In reply to by nmewn

NidStyles Yellow_Snow Sun, 07/15/2018 - 19:19 Permalink

Collapsing into the next world war. 

Do we acknowledge the protocols as real before the war ends, or after it starts?

 

When you leave the door unlocked after you leave, it lets me know you were in my car ;=)

You we’re trespassing on private property. Property I have permission to be on. Thinking is more difficult than moving. Even insects can move.

In reply to by Yellow_Snow

Endgame Napoleon nmewn Sun, 07/15/2018 - 22:26 Permalink

What if Trump’s trade war turned out not to be make believe, but real, leading US-owned companies to leave cheap-labor nations, bringing production back to the USA to rescue massively underemployed Americans?

This would greatly reduce shipping costs, but Americans would still buy some foreign-made products based on quality, not based on rigged competition, with the zero-sum advabtage of cheap labor overriding everything.

Wonder how the advent of accessible 3-D printers affects this offshoring & shipping drama? When it is possible to churn out plastic toys with a small, portable 3-D printer, why would anyone build a factory in a racially homogenous, foreign nation, where over a billion cheap laborers can undercut any American worker any day?

 https://www.xyzprinting.com/en-US/product/da-vinci-color

 

In reply to by nmewn

Enrabard Endgame Napoleon Mon, 07/16/2018 - 12:28 Permalink

If something is rigged is sold by loss or by technical advancement - you can't substitute it with own rigging or big investments only to make the same quality and quantity production - it would be a real waste and cost of labour in US is much higher. If USA does it it means its completely dumb giving away so cheap production with is hard to copy and still be competitive on a smaller market. It's not how market works and how you revive own economy = it's a recipe for an even bigger economical disaster... And make more jobs for underground coal miners so Americans could more often die at work... instead of poor struggling Chinese who actually need to to survive...

In reply to by Endgame Napoleon

harrybrown Rapunzal Sun, 07/15/2018 - 18:33 Permalink

I work in the dock industry at Britains largest container port... this will be interesting indeed. My brother used to be an accountant for maersk also... 

Indeed the EU has fucked maersk but maersk have fucked them selves equally too by remaining under eu rule by choice.

DEATH TO THE ZIONIST MONEY CHANGERS

In reply to by Rapunzal

ThankUGartman Rapunzal Sun, 07/15/2018 - 19:24 Permalink

How many people actually believe alternative news is run by different Zionist than the mainstream news. 90% of humanity watches mainstream news and digest it easily or with little difficulty. From that group is another 8% need more depth and truth to be sold the lie. 1% call billshit on all news but read anyhow just to be informed on what they’re being misinformed about.

That leaves the 1% insiders who know it’s all a horse n pony show because they're in on it and write the articles to be swallowed as truth by the masses and at the same time covertly signaling to those with eyes to see and ears to hear what is coming next. 

As Samuel Clemons used to say “If you don’t read the newspaper you’re uninformed and if you do you’re misinformed. Same goes for other media. 

In reply to by Rapunzal

ThankUGartman Rapunzal Sun, 07/15/2018 - 19:24 Permalink

Example 1) Don’t tread on me. Uses a serpent as it’s logo and caption “don’t tread on me”. Symbolically the serpent represents the devil. 

Example 2) Above top secret

Their purpose is to see how close the LuLu are to getting to the kernel of truth. The acorn. Too close and watch out. Last perimeter of defense. When someone gets too close they are ridiculed or warned first. 

In reply to by Rapunzal

Itdoesntmatter VZ58 Mon, 07/16/2018 - 17:34 Permalink

i've been around since the beginning....2007 to be more accurate...but i left when the site got stupid and supported a fuckin moron for president...and the comment section full of racists and stupid people...i came back to call out the fucking stupidness of fucktards, but fucktards don't care when they get called stupid....the just say 'clinton' 'obama' 'leftists' ....

 

complete fucking morons cheering other morons....

In reply to by VZ58

Itdoesntmatter Argentumentum Mon, 07/16/2018 - 17:30 Permalink

you're a fucking moron...this site used to rail against all politicians...all parties...all banksters....now it's a fucking Trump site...it's fucking disgusting...with a comment section full of sheep, morons, racists, people who don't think, read, or do any research...you fucking bitches believe anything trump says, or fox....stupid cunts are more interested in supporting Trump than your own fucking country....completely disgusting...

In reply to by Argentumentum

Strawboss Rapunzal Sun, 07/15/2018 - 20:12 Permalink

Has it occurred to you that the "market" anticipates (usually through insider leaks) about upcoming policies.  In this case - its been common knowledge for YEARS what Trumps view on trade was - not only with China but the whole world.  Or do you think that the "market" simply reacts to the latest headline?

In reply to by Rapunzal

yvhmer Rapunzal Mon, 07/16/2018 - 02:35 Permalink

There must be a reason.. . Let me see... Ah it is about Asia to Europe cargo. ...

Hmmm...

Once there was a silkroad. . And it became very expensive, both monetise as politically wise. 

But, by the good graces, the Europeans found 2 ways to go to Asia, and the silkroad was done for. 

....Until now. ...

 

In reply to by Rapunzal