Industrials

t17

08/08/2009 by Research Reloaded

t17

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Vincent Fernando
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No Paris Chalets This Year for Business Jet Manufacturers

06/16/2009 by Research Reloaded

No Paris chalets this year for business jet manufacturers at the Paris Airshow. The horror.

While jetliner orders for companies like Boeing (BA) and Airbus are way down, it's even worse for business jet manufacturers. CNBC reported that a lot of business jet buyers didn't even show up this year to the show. Then again, neither would I. Without supplier-sponsored chalets, it probably wouldn't be worth suffering through the ordeal of five star hotels.

Baltic Dry Index - Over 4,000 is Blind Speculation

06/08/2009 by Research Reloaded

Transport Trackers came out with a research note in regards to the BDI's recent ascent to 4,000. Predicting the BDI is a bit of a fool's game, and they do not try to do so. Yet they still make it clear that betting on the BDI beyond 4,000 is pure speculation since dry bulk vessel oversupply risks continue. Can it break 4,000? Sure, especially given that it's an index of spot rates as we have previously explained. But Transport Trackers' ex-Citi Head of Asia Transport Charles de Trenck recommends that prudent capital refrain from further BDI upside speculation. The recent 6.9% one-day drop shows just how quickly this index can turn.

Look at Supply: In 2H09 and into 2010 vessel supply, regardless of delays and cancelation discussion/debates, should bring back concerns of too many bulk ships. We are not against looking at certain long‐term contracts backed by cargo. But from this point on in current cycle, we are against blind speculation on BDI moving above the 4000 level.

US Consumer Confidence Data is More Than Fluff

05/31/2009 by Research Reloaded

US consumer confidence recently rebounded, albeit from a low base. While it's great that people may be feeling more confident, and we can imagine that this means they are willing to spend money to buy products, which generally is a good thing. (as long as they can afford these products, and their products are productive) But is the confidence number just fluff or is there some hard commerce to back it up?

Well, turns out there is. It's nice when things that make sense are actually borne out in data.

Shipping research firm Transport Trackers (TT) came out with an interesting chart showing how key Asian exporter data actually lines up pretty well with US consumer confidence. Without arguing the greater US consumer situation in this post, I think it should b noted that US consumer confidence isn't just fluff, there is tangible export data that goes along with it, ie. real products are demanded in higher quantities and shipped, as shown by TT.

Without expressing a specific view, but noting the market’s long term trends, we have tracked a longer term key Asia exporter against consumer confidence to show the relationship. The MoM correlation is low. But the pattern becomes more clear when looking at the 3‐mth MA.

China Port Data Collapse - Feeling the Pain

05/11/2009 by Research Reloaded

Another great chart, showing the collapse in Chinese container trade via China ports data. Courtesy of Charles de Trenck, long time Citigroup Asia Transport veteran, and my previous boss.

20+% declines Jan‐Feb ‘09…: HK terminals in Jan‐Feb ’09 fell 22%. East Shenzhen did comparatively well, falling only about 9%, but this was also because in Jan‐Feb ’08 Y E Shenzhen was already at ‐9%, while others were still positive. West Shenzhen was ‐22% also in Jan‐Feb (Shanghai was ‐18%). …Singapore reported ‐20% two months running for Jan and Feb 2009

What does this show? Well China sailed through the last US downturn. But this time is a lot different and one has to imagine what a few more quarters of this would do to China's manufacturing heartland. What ever happened to the "China decoupling" arguments? We don't seem to hear those too often anymore.

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