Payden & Rygel: China > US containerized shipping
Markets vacillated all week in response to headlines on tariff policies, Federal Reserve independence, and U.S.-China trade negotiations. Unlike the market's focus on headlines, we're on the hunt for early signs of stress due to trade policy changes.
While the 'soft', survey-type data has been worrying (e.g. consumer confidence), 'hard' data, such as the weekly initial jobless claims, indicate that the labor market remains strong. On Thursday, Fed Governor Chris Waller echoed the view, saying, 'the labor market is in a kind of a good spot'.
But is there any evidence of the damage done by tariffs so far? As an L.A.-based team close to the ports of L.A. and Long Beach, which account for a third of all U.S. containerized shipping, we're looking for early effects in the container shipping data. The number of container ships leaving China for the US jumped in March as companies engaged in 'front running' to ship goods ahead of the imposition of import duties. In April, the volume of ships plunged. With some 'payback' expected after the March jumo and volatile data, is this the canary in the coal mine or just noise? Stay tuned.