Falling freight rates are coming down. This is another sign of the likely onset of a recession in the global economy. Cnbc writes.
Freight rates have fallen due to supply chain disruptions since the start of the COVID-19 pandemic. But the decline in vessel demand is largely due to a decline in trade because of lower demand for goods, analysts with S&P Global Market Intelligence believe.
“Significant decreases in port congestion levels amid a decline in incoming cargo was one of the main causes of falling freight rates,” the research group said in a report.
According to S&P, freight rates peaked in the second quarter, earlier than expected, and then moved downward. The Baltic Dry freight cost index, which tracks prices for ocean freight of bulk and dry bulk cargo worldwide, will fall about 20-30% over the year and won’t begin some recovery until 2024, experts predict.
This underscores the growing risks of a global recession as consumer demand declines amid rising costs of living and inflation.
According to the World Trade Organization, global merchandise trade rose 3.2% year-over-year in the first quarter, compared with a 5.7% rise in the fourth quarter of last year.
We previously reported that China’s Liquefied Natural Gas Companies Increase LNG Sales to Europe.
Demand in a market for smartphones in China fell 13.2% in a year, to a decade low – IDC
Demand in the smartphone market in China fell to 285.8 million units last year, according to research firm IDC. On a year-on-year basis, the figure fell 13.2% to below the 300,000 mark for the first time in a decade. The decline in demand was affected by tight restrictions under the “zero-tolerance” policy on COVID-19 and a slowdown in economic growth in the country.
In the fourth quarter, demand for mobile phones in the PRC declined 12.6 percent to 72.9 million handsets.
“The historically low level of supply is forcing smartphone manufacturers to think about how to build a more sustainable business model and a more focused marketing strategy,” says Will Wong, senior research manager at IDC.
As a positive factor, he notes the end of the policy of harsh anti-covids, which “provides the market with a tailwind.” That said, the expert thinks a quick recovery is unlikely, as consumers have been spending more money recently in areas such as leisure and services.
At the end of 2022, vivo maintained its market leadership despite a 25.1% drop in sales. Honor was the only brand in the top 5 to show sales growth (+34.4%), also due to a low comparison base. OPPO shipments were down 28.2%; Apple Inc. (NASDAQ:AAPL) was down 4.4%, and Xiaomi (HK:1810) was down 23.7%.
Earlier, we reported that the outlook for the likelihood of a recession in most markets has declined.
Predicting recession probabilities in most markets declined
Predicting recession probabilities have fallen sharply from the highs of 2022, the JPMorgan Chase & Co (NYSE:JPM) model shows.
In seven of the nine asset classes tracked by the model, from European stocks to investment-grade bonds, current quotes suggest recession chances are below 50%. The value of the S&P 500 suggests traders see a 73 percent chance of an economic downturn in the U.S., up from 98 percent last October, Bloomberg wrote, citing data from the bank.
Do economists predict a recession?
“Most asset classes are showing a gradual reduction in recession risks Thanks to the opening of the Chinese economy, the collapse in gas prices in Europe, and a more pronounced than expected slowdown in U.S. inflation,” said JPMorgan strategist Nikolaos Panikirtzoglu. — The market now sees a much lower likelihood of a recession than in October.”
Meanwhile, his colleague Marko Kolanovic warned that investors may be underestimating the potential pressure that a slowdown in U.S. economic growth could put on stocks in the coming months. At the same time, factors such as a decline in industrial production and retail sales, as well as a rally in the bond market and the Federal Reserve’s promise to keep rates high will play into the bulls’ hands.
Economists, on the contrary, have become more pessimistic-their consensus forecast calls for a 65% chance of a recession versus a 50% chance in October, Bloomberg notes.
Negative signals are also observed in the bond market — the yield on three-month US government bonds exceeds the yield on 10-year securities, indicating that investors are waiting for a slowdown in economic growth in the coming months.
On the other hand, many market participants are hopeful that the world’s central banks will be able to give the economy a soft landing — and it’s precisely because of such hopes that risky assets have rallied in recent weeks.
“I don’t want to say growth will be outstanding, I just think it won’t be a nightmare,” HSBC strategist Max Kettner told Bloomberg. — There are simply no catalysts to a decline and no unpleasant surprises, so the only way is up.”
Earlier we reported that the U.S. Treasury is going to use emergency measures because the national debt is getting closer to the ceiling.
U.S. Treasury starts using emergency measures because of the approach of the state debt to the upper limit of debt obligations
Yesterday, U.S. Treasury Secretary Janet Yellen told Congress that her office had begun using emergency measures because the size of the national debt is approaching the upper limit of debt obligations. These measures will prevent a default in the next few months, notes MarketWatch.
According to the treasury secretary, “it is unlikely that the money and the emergency measures will be exhausted before early June.”
Late last week, Yellen warned in a letter to congressional leaders that the U.S. could reach the national debt ceiling on Jan. 19, and an increase or suspension of the limit is needed to avoid a default.
“Failure to meet the government’s obligations would irreparably harm the U.S. economy, the livelihood of all Americans, and global financial stability,” the document said.
The Debt Limit definition is the statutory limit on the U.S. government’s borrowing to pay its current obligations, including Social Security, Medicare, and military salaries. Currently, this limit is about $31.4 trillion.
Earlier we reported that the Central Bank of China again kept the prime rate at 3.65%.
- Stock Markets10 months ago
WeLion Cooperates with Nio to Produce Semi-Solid Battery
- Forex6 months ago
Forex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- World7 months ago
Russia expands U.S. sanctions list to include Biden’s wife and daughter
- World7 months ago
Rescuers dig for survivors after Russian missiles pound Ukrainian shopping mall
- World7 months ago
Rescuers dig for survivors after Russian missiles demolish Ukrainian shopping mall
- Stock Markets7 months ago
Easing chip shortages to help Volkswagen in H2 – CEO
- World7 months ago
U.S. Capitol riot panel promises new evidence at surprise Tuesday hearing
- World3 months ago
Why are modern video games an art form?