Option chain shows key data for A P Moller Maersk's stock options at various strike prices and expiration dates. Traders use this information to analyze potential trades and assess market sentiment for A P Moller Maersk.

A P Moller Maersk (OTC:AMKBY) Stock, Option Chain

A P Moller Maersk

A P MOLLAR-MAERSK A/

A. P. Moller Maersk

Denmark-listed A.P. Moller-Maersk operates trade, shipping, logistics and terminal assets globally. The oceans segment, the largest contributor to group revenue and earnings, has the second-largest oceangoing shipping capacity globally. Maersk has acquired several logistics firms in the past couple of years and plans for the segment to be the company's growth engine. Over the past few years, Maersk has divested noncore operations, such as its long-standing stakes in Danske Bank and Dansk Supermarked as well as its oil and gas operations and ocean towing.

AMKBY

KYOCY

Under the Radar - October 29th, 2024

Asia,Logistic,Engineer,Man,Worker,Or,Foreman,Use,Walkie,Talkie

Analyst Color

Equities

Macro Economic Events

Econ #s

Economics

Markets

Trading Ideas

ABBNY

The ILA and USMX labor contract expired, resulting in a strike by dockworkers. This may cause supply chain disruptions and a modest economic impact.

East Coast Dockworkers Strike: How Labor Dispute Impacts Economy, Logistics Companies

Ships at sea

News

Global

Maersk, the world&#39;s largest container shipping company, has announced that the ongoing disruptions in the Red Sea will significantly impact the industry&#39;s capacity in the second quarter.

Red Sea Disruptions To Cut Shipping Capacity By 15-20% In Q2, Says Maersk

A.P MOLLER-MRS UNS/ADR by A.P. Moeller-Maersk A/S

A P Moller Maersk AS

A. P. Moller Maersk (OTC:<a class="ticker" href="https://www.benzinga.com/stock/AMKBY#OTC">AMKBY</a>) reported quarterly earnings of $0.97 per share which missed the analyst consensus estimate of $0.99 by 2.02 percent. This is a 525.81 percent increase over earnings of $0.15 per share from the same period last year. The company reported quarterly sales of $15.76 billion which beat the analyst consensus estimate of $15.66 billion by 0.65 percent. This is a 29.95 percent increase over sales of $12.13 billion the same period last year.

Earnings

Earnings Beats

Earnings Misses

A. P. Moller Maersk Q3 EPS $0.97 Misses $0.99 Estimate, Sales $15.76B Beat $15.66B Estimate

You probably never heard of Walter Schloss.
Walter passed on to the great market in the sky in 2012 at the age of 95 after a long and, as many would say, unremarkable career on Wall Street.
He was never famous.
He was not a frequent guest on Wall Street Week and was only mentioned in Barron&#8217;s a few times throughout his five-decade career.
Walter&#8217;s office was converted to be close to the offices of fellow Ben Graham aficionados Tweedy Brown. It was meant to be temporary quarters, but he never got around to leaving.
Walter was mentioned in Warren Buffett&#8217;s 1984 article in Hermes, the Columbia University Business School magazine. At that time, Schloss had been managing his partnership since 1955 and averaged 21% a year over that 19-year period.
Walter was not a graduate of Columbia or any other university. He started on Wall Street as a runner in 1934 and took night classes at the New York Stock Exchange Institute to learn more about markets. His professor was a studious gentleman named Benjamin Graham, who taught Walter value investing concepts.
Schloss worked for Graham for several years and eventually went out on his own when Graham closed his original investment partnership in 1955.
The fund stayed in existence until Schloss closed his doors in 2002.
He had no computer or quote machine on his desk.
He had a phone, the Standard &amp; Poor&#8217;s Stock Guide, and the Value Line Investment Survey, but little else.
With tools and knowledge from working around Ben Graham, Warren Buffett, and other founding fathers of value investing, Schloss earned about 20% a year over a 47-year career as a fund manager.
That is one of the best track records in the history of investing.
Walter Schloss did not buy the super exciting growth stocks. Over his career, technology grew by leaps and bounds, with thousands of super exciting companies coming and mostly going over the long run.
Entire industries were created, matured, and died during his career.
When he opened his fund, very few people had a television, and radio was still a big deal.
Franklin Roosevelt was President when he went to Wall Street, and George W. Bush was President when he left.
He had a philosophy of investing, and he never deviated from it.
Stories and fads came and went in society as well as on Wall Street, and Schloss just stuck to his knitting.
He invested in financially sound companies that traded below book value and held them until they traded for more than the company was worth.
He liked to buy stocks when they were trading near multi-year lows.
Walter was a big fan of dividends.
Unlike his more focused former co-worker, Warren Buffett, Schloss owned lots of stocks in his portfolio.
Most were smaller companies with solid balance sheets, traded at a discount to asset value, and were way off Wall Street&#8217;s radar screen.
When I mention Schloss today, people tell me that he is too old-fashioned to work in today&#8217;s complex world, and with all the fancy accounting gimmicks surrounding technology stocks and other market leaders, price-to-book value is meaningless.
I cannot tell you how glad I am that they think so.
The further off the radar screen this deep value approach to investing is, the easier it is for Under the Radar investors to earn massive long-term returns.
We can get further away from mainstream thinking by taking our Schlossian bargain-hunting strategy overseas.
U.S. stocks account for more than 60% of the global market cap right now, and the general attitude towards European and Japanese stocks is a muffled chorus of &#8220;Who cares?&#8221;
&#8220;Who cares?&#8221; is a bargain hunter&#8217;s dream.
Kyocera Corp. (Ticker: KYOCY)
<figure class="wp-block-gallery has-nested-images columns-default is-cropped wp-block-gallery-1 is-layout-flex wp-block-gallery-is-layout-flex"> 
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="538" data-id="620163" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29142347/Screenshot-2024-10-29-132331-1024x538.png" alt="" class="wp-image-620163" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29142347/Screenshot-2024-10-29-132331-1024x538.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29142347/Screenshot-2024-10-29-132331-300x158.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29142347/Screenshot-2024-10-29-132331-768x403.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29142347/Screenshot-2024-10-29-132331.png 1066w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure> 
</figure>
Source: Benzinga Pro Kyocera is a massive Japanese conglomerate with over 300 subsidiaries that manufacture everything from ceramic components to semiconductors to solar panels.
The company also has a telecommunication business they would be better off selling.
Kyocera has more than 70% of the market and has a 75%-80% market share of ceramic packages used to protect semiconductors after they are installed on circuit boards.
The company pays out about 30% of cash flow every year as a dividend, which should amount to about 3% this year.
According to my calculations, the shares&#8217; break-up value is more than two times the current stock price. Shares trade at just 85% of asset value, and the balance sheet is rock solid.
Based in Copenhagen, Denmark, A.P. Moller-Maersk A/S (Ticker: AMKBY) is a global leader in integrated container logistics and shipping. Maersk focuses on end-to-end supply chain solutions, leveraging technology to enhance logistics efficiency and sustainability. Its services range from ocean and inland shipping to warehousing, air freight, and supply chain management.
After some normalizing of the shipping industry after the post-COVID surge, Moller-Maersk is experiencing increased earnings momentum across segments. Maersk experienced strong market demand and volume growth, achieving EBITDA of $2.1 billion and EBIT of $1.0 billion.
The Ocean segment benefited from rising freight rates, with the Red Sea disruption impacting profitability.
&nbsp;Logistics and Services showed a sequential improvement in EBIT, progressing toward a 6% margin goal driven by investments and acquisitions.
Terminals performed well, posting high EBITDA with a 37.5% margin due to volume growth and cost management.
Maersk&#8217;s full-year guidance was recently revised upward. Underpinned by robust demand and operational efficiency, it projects underlying EBITDA of $9-11 billion and EBIT of $3-5 billion.
The company emphasizes a strong balance sheet, cost discipline, and a focus on expanding capacity and automation to support future growth. Key priorities for 2024 include network improvements, fleet renewal, and maintaining customer service agility.
Despite the business improvements and bright outlook, the stock is cheap. Right now, shares of A.P. Moller-Maersk A/S are trading at less than 60% of tangible book value. The balance sheet is solid, and the company has a generous dividend policy that should see an annual payout in the 8-9% range this year.
With very little fanfare or publicity, Walter Schloss made his investors and his family very wealthy. We can use the same low-key, highly profitable approach to achieve the same results for ourselves.

Guidance

Maersk Updates Q3 2024 Results And Raises FY Guidance; Sees 2024 Underlying EBITDA $11.0B-$11.5B; Reports Q3 EBIT Of $3.3B; Revises Global Container Market Volume Growth Outlook To Around 6% For FY

The labor contract between the International Longshoremen's Association and U.S. Maritime Alliance <a href="https://www.benzinga.com/news/24/10/41111978/dockworkers-strike-will-it-impact-your-holiday-shopping">expired overnight on Tuesday</a>. The ILA — whose members comprise dockworkers on the East Coast —&nbsp;is now officially on strike.
<a href="https://www.benzinga.com/topic/supply-chain">Supply chain disruptions</a> stemming from a prolonged strike may affect several companies and the U.S. economy as a whole.
What Happened: The dispute stems from two fundamental disagreements between the stevedores and port employers.
In their collective bargaining agreement, the ILA proposed a 77% pay raise over the next six years. The USMX <a href="https://www.usmx.com/assets/content/public-resources/9-30-24_USMX_UPDATE_Status_of_USMX-ILA_Negotiations.pdf">countered</a> with 50%.
&#8220;Our offer would increase wages by nearly 50 percent, triple employer contributions to employee retirement plans, strengthen our health care options, and retain the current language around automation and semi-automation,&#8221; the association said in a statement.
ILA President Harold Daggett <a href="https://ilaunion.org/letter-of-opposition-to-usmxs-misleading-statement/">urged</a> the USMX to agree to a larger wage increase to address inflation.
&#8220;USMX claims to offer industry-leading wages. However, their interpretation of &#8216;leading wages&#8217; is polar opposite to ours. Inflation has completely eaten into any raises and wages,&#8221; Daggett said.
Another fundamental disagreement comes from efforts to automate several port functions.
&#8220;USMX is trying to fool you with promises of workforce protections for semi-automation,&#8221; Daggett said. &#8220;Let me be clear: we don't want any form of semi-automation or full automation. We want our jobs—the jobs we have historically done for over 132 years.&#8221;
President Joe Biden <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2024/09/30/remarks-by-president-biden-before-air-force-one-departure-dover-de/">told</a> reporters on Monday that he would not intervene in the matter, reiterating support for collective bargaining.
The closure will <a href="https://ilaunion.org/map/">affect</a> several U.S. ports, including Baltimore, Boston, New York and Philadelphia.
Economic Impact: RSM economist Joseph Brusuelas said the strike implies a modest impact on the U.S. economy.
&#8220;Labor action by port workers along the East and Gulf coast of the United States will provide a modest hit to GDP of a little greater than 0.1 percentage points per week or roughly $4.3 billion in lost exports and imports. If sustained that would result in roughly 0.5% percentage points shaved from overall GDP in the final quarter of 2024,&#8221; Brusuelas said.
&#8220;Given that the American economy is on a 3% growth path at this time, we do not expect the strike to derail the trajectory of the domestic economy or present a risk to an early and unnecessary end to the current economic expansion.&#8221;
The economist said the continued operation of ports in the western U.S. would likely lessen much of the strike&#8217;s economic impact.
When will the Strike End?: In a note published Monday, Morgan Stanley logistics analyst Ravi Shanker expressed a belief that the strike will end sooner rather than later.
&#8220;&#8230;in the event of a work stoppage, we believe it is highly unlikely to be prolonged,&#8221; Shanker said.
Affected Companies: ZIM Integrated Shipping Services Ltd (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ZIM#NYSE">ZIM</a>), A P Moller Maersk (OTC:<a class="ticker" href="https://www.benzinga.com/stock/AMKBY#OTC">AMKBY</a>), XPO Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XPO#NYSE">XPO</a>) are publicly traded logistics companies likely to be affected by a sustained supply chain disruption.
Walmart Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>) and Target Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TGT#NYSE">TGT</a>), two of the largest U.S. retailers, could face increased supply chain costs and inventory shortages if the dockworker strike persists.
Additionally, an agreement between the ILA and USMX on automation protection would likely affect companies manufacturing the equipment.
ABB Ltd (OTC:<a class="ticker" href="https://www.benzinga.com/stock/ABBNY#OTC">ABBNY</a>) and Cargotec Corp (HEL: CGCBV) are among the largest distributors of dock automation technology.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/news/24/09/41108345/apples-satellite-messaging-feature-emerges-as-lifeline-after-hurricane-helene-leaves-thousands-witho">Apple&#8217;s Satellite Messaging Feature Emerges As Lifeline After Hurricane Helene Leaves Thousands Without Cell Phone Service: Here&#8217;s How You Can Use It</a></li>
</ul>
Photo: Shutterstock

A. P. Moller Maersk (OTC:<a class="ticker" href="https://www.benzinga.com/stock/AMKBY#OTC">AMKBY</a>), the world&#8217;s largest container shipping company, has announced that the ongoing disruptions in the Red Sea will significantly impact the industry&#8217;s capacity in the second quarter.
What Happened: The disruptions, caused by attacks from Iran-aligned Houthi militants, are expected to reduce the shipping industry&#8217;s capacity between the Far East and Europe by 15%-20% in the second quarter, reported Reuters.
&#8220;The risk zone has expanded, and attacks are reaching further offshore. This has forced our vessels to lengthen their journey further, resulting in additional time and costs to get your cargo to its destination for the time being,&#8221; Maersk said in an updated advisory to customers on Monday.
Maersk and other shipping companies have been rerouting vessels around Africa&#8217;s Cape of Good Hope since December to avoid these attacks. This has led to longer voyage times and subsequently increased freight rates.
See Also: <a href="https://www.benzinga.com/news/24/05/38542692/tesla-ceo-elon-musk-is-impressed-by-the-fact-that-jeff-bezos-aws-12-month-revenue-is-higher-than-466?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Tesla CEO Elon Musk Is Impressed By The Fact That Jeff Bezos&#8217; AWS 12-Month Revenue Is Higher Than 466 S&amp;P</a>
The Danish shipping giant, often seen as a barometer of global trade, has warned that the risk zone has expanded, with attacks reaching further offshore. This has forced vessels to take even longer routes, resulting in additional time and costs to deliver cargo.
Maersk has also noted that the disruptions are likely to persist until the end of the year, leading to bottlenecks, vessel bunching, and shortages of equipment and capacity. The company is taking measures to enhance reliability, including faster sailing and the addition of capacity. It has already leased over 125,000 additional containers.
Why It Matters: The disruptions in the Red Sea have been ongoing for several months. In April, the U.S. military <a href="https://www.benzinga.com/news/24/04/38156206/us-military-strikes-houthi-air-defense-and-drone-systems-in-red-sea-region-amid-escalating-tensions">launched strikes against Houthi air defense systems in Yemen</a>, aiming to safeguard the Red Sea&#8217;s shipping lanes. Despite these efforts, the disruptions have continued, impacting global trade and shipping capacity.
These disruptions are part of a broader pattern of geopolitical tensions in the region. In April, Iran&#8217;s nuclear facilities in Isfahan province were <a href="https://www.benzinga.com/news/24/04/38328453/iran-says-nuclear-facilities-safe-after-israeli-strike-us-confirms-escalation">reportedly targeted in an Israeli strike</a>, further escalating tensions in the area.
Read Next: <a href="https://www.benzinga.com/news/24/05/38607615/russian-troops-enter-us-military-base-in-niger-amid-rising-tensions?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Russian Troops Enter US Military Base In Niger Amid Rising Tensions</a>
Image Via Unsplash 
<hr class="wp-block-separator has-alpha-channel-opacity" />
Engineered by Benzinga Neuro, Edited by <a href="https://www.benzinga.com/topic/Kaustubh-Bagalkote" target="_blank" rel="noreferrer noopener">Kaustubh Bagalkote</a>
<hr class="wp-block-separator has-alpha-channel-opacity" />
The GPT-4-based Benzinga Neuro content generation system exploits the extensive Benzinga Ecosystem, including native data, APIs, and more to create comprehensive and timely stories for you. <a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Learn more.</a>
<hr class="wp-block-separator has-alpha-channel-opacity" />

Baltimore was rocked by tragedy early Tuesday as the&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/03/37930898/watch-baltimores-key-bridge-collapses-after-ship-collides-rescue-operations-for-7-people-underway" rel="noreferrer noopener">Francis Scott Key Bridge&nbsp;collapsed</a>&nbsp;after a cargo ship, operated by&nbsp;Synergy Group&nbsp;and chartered by Danish shipping giant&nbsp;AP Moller Maersk&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/AMKBY#OTC">AMKBY</a>), lost power and struck a support column. This catastrophic event led to multiple vehicles plunging into the river below, sparking a desperate search for survivors.
Effect Of Collision: As rescue efforts unfolded, it was reported by several media outlets that two persons working on the bridge had been rescued, while tragically, six others were presumed dead by their employer.
Vital Link:&nbsp;The Key Bridge, a vital thoroughfare facilitating the passage of over 30,000 vehicles daily, stands as a critical artery in the region&#8217;s transportation network.&nbsp;
Constructed between 1972 and 1977 for $60.3 million, the bridge primarily comprises lightweight concrete, as outlined in a November 2021 report by the U.S. Federal Highway Administration, Vox <a href="https://www.vox.com/2024/3/26/24112776/baltimore-bridge-collapse-francis-scott-key-maryland-cargo-ship-explainer-analysis">reported</a>.
The incident&#8217;s repercussions extend beyond Baltimore, <a href="https://www.benzinga.com/markets/equities/24/03/37939090/baltimore-key-bridge-tragedy-pressures-global-trade-shipping-already-hit-by-panama-canal-red-sea" target="_blank" rel="noreferrer noopener">affecting global trade</a> amidst existing challenges in the shipping industry such as record-breaking droughts in Panama to Houthi strikes on ships in the Red Sea.
See Also: <a href="https://www.benzinga.com/money/best-supply-chain-related-stocks" target="_blank" rel="noreferrer noopener">Best Supply Chain Related Stocks</a>
Who Bears The Costs?&nbsp;The insurance sector anticipates significant liabilities, as&nbsp;<a target="_blank" href="https://www.ft.com/content/17cf3f2e-e64d-4666-b1c2-2723347c2ada" rel="noreferrer noopener">per</a>&nbsp;the Financial Times, with insurers expected to cover extensive losses, including bridge damage, port disruptions, and potential loss of life. The focus reportedly centers on protection and indemnity insurance, with&nbsp;Britannia P&amp;I Club, among others, facing scrutiny in navigating this complex situation.
Initial estimates suggest potential insurance payouts could rival the approximately $1.5 billion disbursed after the 2012 <a href="https://www.benzinga.com/news/earnings/12/02/2311852/royal-caribbean-sinking-as-tourists-stay-ashore">Costa Concordia cruise ship crash</a>, as per a marine insurance expert quoted by FT.
President&nbsp;Joe Biden&nbsp;expressed his commitment to federal support for the bridge&#8217;s reconstruction, pledging the government&#8217;s full backing. &#8220;It is my intention that the federal government will pay for the entire cost of reconstructing that bridge, and I expect the Congress to support my effort,&#8221; he said in remarks from the White House. &#8220;To the people of Baltimore, I want to say, we&#8217;re with you. We&#8217;re going to stay with you as long as it takes.&#8221;
Flexport CEO&nbsp;Ryan Petersen,&nbsp;whose company has two containers on the ship, underscored the intricate legal nuances surrounding liability in a social media post. Contrary to his initial assumptions, he said cargo owners may only be responsible for damages to the vessel and cargo, with the ship operator and their P&amp;I insurance carrier assuming broader financial obligations.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">This morning I tweeted that the cargo owners would have to pay for the damages to the bridge under the principle of maritime law known as general average. I was wrong. It appears they will only have to pay for the damage to the vessel and the cargo, split pro rata based on how…
&mdash; Ryan Petersen (@typesfast) <a href="https://twitter.com/typesfast/status/1772756557891297376?ref_src=twsrc%5Etfw">March 26, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
Read Next: <a href="https://www.benzinga.com/24/03/37952153/xi-jinping-meets-american-ceos-in-effort-to-mend-china-us-business-ties">Xi Jinping Meets American CEOs In Effort to Mend China-US Business Ties</a>
Photo via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Media

How Much Will Baltimore Bridge Damage Cost — And Who Will Pay For It?

While search and rescue remains the top priority following the tragic collapse of the Francis Scott Key Bridge in Baltimore early Tuesday, the costs to global trade, markets and industry are already<a href="https://www.benzinga.com/news/24/03/37930898/watch-baltimores-key-bridge-collapses-after-ship-collides-rescue-operations-for-7-people-underway"> being examined</a>.
The container ship that veered off course and struck the bridge, causing its dramatic and immediate collapse, was the Dali, operated by charter vessel company Synergy Group and chartered by Danish shipping giant AP Moller Maersk (OTC:<a class="ticker" href="https://www.benzinga.com/stock/AMKBY#OTC">AMKBY</a>).
Maersk&#8217;s shares were down nearly 6% Tuesday, although it was not known whether the company will face any liability over the accident. It issued a statement that read:
&#8220;We are closely following the investigations conducted by authorities and Synergy, and we will do our utmost to keep our customers informed.&#8221;
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/26104010/newplot-2024-03-26T143951.328.png" alt="" class="wp-image-265775" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/26104010/newplot-2024-03-26T143951.328.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/26104010/newplot-2024-03-26T143951.328-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
<h2 class="wp-block-heading">East Coast Shipping Hub</h2>
Baltimore is an important shipping hub. It is the ninth-biggest U.S. port for international cargo and in 2023 it handled 52.3 million tons valued at nearly $81 million, according to a statement from the office of Maryland Gov. Wes Moore.
Moore issued a statement following the incident. It read: &#8220;We are thankful for the brave men and women who are carrying out efforts to rescue those involved and pray for everyone's safety.&#8221;
In a statement on the Maryland Port Administration website, it was announced: &#8220;Vessel traffic into and out of the Port of Baltimore is suspended until further notice. This does not mean the Port of Baltimore is shutdown. We are still processing trucks inside of our terminals.&#8221;
<h2 class="wp-block-heading">Auto Trade And Supply Chains</h2>
Baltimore is one of the chief ports serving the U.S. automobile industry, and in 2023 it handled 847,158 cars and light trucks. 
There was little market impact on U.S. carmakers General Motors Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GM#NYSE">GM</a>) and Ford Motor Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/F#NYSE">F</a>), with shares of both automakers trading higher Tuesday. 
Shipping lines were likely to be affected, however, creating further problems for global supply chains. 
Already under pressure due to lanes through the Red Sea and Suez canal being hit by attacks from Iran-backed Houthi rebels, shipping companies heading for Baltimore will now have to divert to alternative East Coast ports.
Supply side shocks are the &#8220;worst thing&#8221; that can occur for the Fed and the economy, Citigroup&#8217;s Andrew Hollenhorst told Bloomberg, adding that such shocks reduce capacity and increase inflation. 
Emily Stausbøll, an analyst at Oslo-based shipping-analytics company Xeneta, said in a statement: &#8220;Far East to US East Coast ocean freight services have already been impacted by drought in the Panama Canal and recent conflict in the Red Sea, which saw rates increase by 150%. This latest incident will add to those concerns."
The SonicShares Global Shipping ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BOAT#NYSE">BOAT</a>), which tracks prices of global freight companies, was down slightly on Tuesday morning.
U.S. companies listed within the BOAT ETF include Golden Ocean Group Ltd&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOGL#NASDAQ">GOGL</a>), a Bermuda-based dry bulk shipper, which fell 1%, and Star Bulk Carriers Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SBLK#NASDAQ">SBLK</a>) which fell 2.3%.
Cruise lines also operate out of Baltimore, with both Carnival Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CCL#NYSE">CCL</a>) and Royal Caribbean Cruises Ltd (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RCL#NYSE">RCL</a>) owning major terminals in the port. Shares in both companies were trading a little higher on Tuesday morning.
Now Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37920082/can-carnival-stock-cruise-higher-after-q1-earnings">Can Carnival Stock Cruise Higher After Q1 Earnings?</a>
Image via Shutterstock.

Large Cap

Sector ETFs

Commodities

Travel

ETFs

General

BOAT

GOGL

SBLK

Baltimore Key Bridge Tragedy Pressures Global Trade: Shipping Already Hit By Panama Canal, Red Sea Challenges

International oil group BP plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BP#NYSE">BP</a>) and the Abu Dhabi National Oil Company have suspended talks in their joint bid to buy a stake in Israeli gas company NewMed Energy.
U.K.-based BP and the United Arab Emirates state-owned ADNOC were negotiating the $2 billion purchase of a 50% stake in the Israeli oil and gas exploration and production company.
According to a <a href="https://newmedenergy.com/wp-content/uploads/2024/03/NewMed-IR-10.3.24-%D7%9E%D7%95%D7%A0%D7%92%D7%A9.pdf">statement</a> by NewMed: &#8220;The Committee and Consortium have agreed, due to the uncertainty created by the external environment, to suspend discussions in relation to the proposed transaction.&#8221;
NewMed added that the process would remain suspended until discussions either resume or are terminated.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/13080344/newplot-2024-03-13T120321.756.png" alt="" class="wp-image-249855" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/13080344/newplot-2024-03-13T120321.756.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/13080344/newplot-2024-03-13T120321.756-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Also Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37591635/gold-speculators-pave-ground-for-multi-year-bull-market-in-metals">Gold Speculators Pave Ground For &#8216;Multi-Year Bull Market In Metals&#8217;</a>
BP spokesperson David Nicholas declined to comment. 
The deal was announced in March 2023 and was seen as an important step in the &#8220;normalization&#8221; of diplomatic relations between Israel and the UAE. The talks, however, appear to have become strained as Israel&#8217;s response to <a href="https://www.benzinga.com/news/23/10/35136071/israel-under-siege-unprecedented-hamas-attack-sparks-intense-clashes-netanyahu-says-we-are-at-war">Hamas&#8217; Oct. 7 attack</a> has further soured Arab-Israeli tensions. 
The Israel-Hamas war and its wider influence have also made trading conditions for Western companies operating around the Middle East extremely tough.
<h2 class="wp-block-heading">Shipping And Coffee Drinkers Hit</h2>
Many shipping companies, including oil companies and container freighters such as Moller Maersk (OTC:<a class="ticker" href="https://www.benzinga.com/stock/AMKBY#OTC">AMKBY</a>) and Hapag Lloyd, are now incurring greater costs and delays by avoiding Red Sea routes as Iran-backed Houthi militia continue to attack international shipping in the area.
The SonicShares Global Shipping ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BOAT#NYSE">BOAT</a>), an exchange-traded fund that holds global freight companies, is up around 5% since the start of the year.
Meanwhile, Starbucks Corporation (NASADAQ: SBUX) reported last week that its Middle Eastern franchisee, Kuwait-based Alshaya Group, had sacked 2,000 employees across the region as boycotts of Western companies caused &#8220;difficult trading conditions.&#8221;
The company said in January it was seeing a "significant impact on traffic and sales" in the Middle East as citizens boycotted the company due to its alleged support for Israel.
Now Read: <a href="https://www.benzinga.com/government/24/03/37632374/fears-of-middle-east-escalation-as-israel-and-hezbollah-clashes-intensify">Fears Of Middle East Escalation As Israel And Hezbollah Clashes Intensify</a>

Government

Politics

SBUX

Geopolitical Unrest Halts BP, Adnoc's $2B Bid For Israeli Gas Firm

Zim Integrated Shipping Services Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ZIM#NYSE">ZIM</a>) shares are trading lower Thursday as turmoil in the Red Sea creates <a href="https://www.benzinga.com/markets/equities/24/02/37014564/red-sea-crisis-hits-maersk-outlook-oversupply-will-cause-price-pressure-impact-results">uncertainty among shipping companies</a>.
The Details: 
Shipping giant Moller Maersk (OTCPK:AMKBY) shares are leading the industry lower after it reported earnings on Thursday and warned of uncertainty in its 2024 guidance. 
"The current market remains one of robust volumes, but while the Red Sea crisis has caused immediate capacity constraints and a temporary increase in rates, eventually the oversupply in shipping capacity will lead to price pressure and impact our results," warned Maersk CEO Vincent Clerc. 
Many shipping and freight companies have re-routed ships in order to avoid the Red Sea due to continuing attacks on vessels by Iran-backed Houthi militia. Bank of England Monetary Policy Committee member Catherine Mann warned of a possible rise inflation resulting from the supply chain disruption. 
According to data from <a href="https://pro.benzinga.com/?gspk=YWRhbWVja2VydDUzMzY&amp;gsxid=zBMR4PKmcgBw">Benzinga Pro</a>, Zim shares are falling on heavy volume with more than 10.3 million shares traded, compared to the stock&#8217;s average volume of 7.909 million shares. 
Related News: <a href="https://www.benzinga.com/markets/cryptocurrency/24/02/37013352/whats-going-on-with-bitcoin-miner-cleanspark-stock">What&#8217;s Going On With Bitcoin-Miner CleanSpa</a><a href="https://www.benzinga.com/markets/cryptocurrency/24/02/37013352/whats-going-on-with-bitcoin-miner-cleanspark-stock">rk Stock?</a>
ZIM Price Action: According to <a href="https://pro.benzinga.com/?gspk=YWRhbWVja2VydDUzMzY&amp;gsxid=zBMR4PKmcgBw">Benzinga Pro</a>, Zim Integrated Shipping shares are down 7.58% at $12.25 at the time of publication. 
Photo by andy-li from Unsplash

Movers & Shakers

Turmoil In The Red Sea: Why Zim Integrated Shipping Stock Is Sinking

The impact of shipping disruptions hasn&#8217;t yet been felt in global commodity markets, but the companies that are carrying freight around longer routes are <a href="https://www.benzinga.com/topic/red-sea">certainly feeling the pain</a>.
What Happened: Shares in Danish shipping giant Moller Maersk (OTC:<a class="ticker" href="https://www.benzinga.com/stock/AMKBY#OTC">AMKBY</a>) were down 15.5% in morning trade in the U.S. after it warned of the possible impact of the &#8220;new uncertainty&#8221; on its 2024 earnings. The company added that it was immediately suspending its share buyback program.
Vincent Clerc, CEO, said: &#8220;The current market remains one of robust volumes, but while the Red Sea crisis has caused immediate capacity constraints and a temporary increase in rates, eventually the oversupply in shipping capacity will lead to price pressure and impact our results.&#8221;
He added, when <a href="https://www.cnbc.com/2024/02/08/maersk-q4-earnings-2023-suspends-share-buybacks-amid-red-sea-disruption.html">interviewed</a> on CNBC earlier: &#8220;The impact of this situation is causing new uncertainty for how this is going to play out from an earnings perspective throughout the year.
&#8220;We have very little visibility as to whether this is a situation that will resolve in a matter of weeks or months, or whether this is something that is going to be with us for the full year.&#8221;
Maersk now anticipates full-year earnings in 2024 to be somewhere between $1 billion and $6 billion. In its full-year 2023 results, announced on Thursday, the company reported earnings of $9.6 billion.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/08130848/newplot-73.png" alt="" class="wp-image-209714" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/08130848/newplot-73.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/08130848/newplot-73-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Also Read: <a href="https://www.benzinga.com/news/24/01/36861784/houthis-vow-to-continue-targeting-us-uk-after-firing-another-missile-at-washingtons-warship-in-red-s">Houthis Vow To Continue Targeting US, UK Warships In Red Sea &#8211; Benzinga</a>
Fourth-quarter earnings were also on the low side of expectations. For the October-December period, Maersk reported core earnings of $839 million compared to the $1.13 billion expected by the market.
While the company called the results &#8220;solid,&#8221; it said its $51.1 billion annual revenue had been impacted by declining freight rates.
Although the share buyback was canceled, the company said it was paying an annual dividend of NOK515 ($48.50) per Copenhagen-listed share. Shares on the Danish exchange were down 16% to NOK10,780.
Why It Matters: Many container shipping firms and bulk carriers have been avoiding the Red Sea due to the continuing attacks on vessels by Iran-backed Houthi militia from Yemen.
This has caused delays and additional costs as shipping heading for Europe and the U.S. east coast diverts around the Cape of Africa. The Containerized Freight Index has more than doubled since October, from around 1,000 to more than 2,000 points.
Oil that is usually shipped through the Red Sea has also been diverted around Africa, but so far the price response has been minimal.
On Thursday, Bank of England Monetary Policy Committee member Catherine Mann warned of the supply chain disruption from the Red Sea could quickly feed into goods pricing around the world and drive another rise in inflation.
Meanwhile, Germany said it was deploying a naval frigate to the region to have it take part in an EU mission to defend shipping from further attacks.
Now Read: <a href="https://www.benzinga.com/news/24/01/36813186/houthi-rebels-fire-missile-at-us-warship-amid-red-sea-conflict-theyre-now-finally-calling-a-spade-a">Houthi Rebels Fire Missile At US Warship Amid Red Sea Conflict</a>
Image: Shutterstock

Red Sea Crisis Hits Maersk Outlook: 'Oversupply Will Cause Price Pressure, Impact Results'

A.P. Moller - Maersk Earlier Said High Uncertainty Remains Around Duration And Degree Of Red Sea Disruption

A.P. Moller - Maersk Earlier Said It Expects Significant Oversupply Challenges In Ocean Industry Will Materialize Over Course Of 2024

Earlier Announced A.P. Moller - Maersk Sees Container Volume Growth 2.5%-4.5%, Inline With Market

Buybacks

Earlier Announced A.P. Moller - Maersk Terminates Fifth Phase Of Share Buyback Program

A. P. Moller Maersk (OTC:<a class="ticker" href="https://www.benzinga.com/stock/AMKBY#OTC">AMKBY</a>) reported quarterly losses of $(0.14) per share. The company reported quarterly sales of $11.74 billion which beat the analyst consensus estimate of $11.46 billion by 2.41 percent. This is a 34.11 percent decrease over sales of $17.82 billion the same period last year.

Earlier Reported A. P. Moller Maersk Q4 2023 GAAP EPS $(0.14), Sales $11.74B Beat $11.46B Estimate

After the stunning rally that ended 2023, investors <a href="https://www.benzinga.com/news/earnings/24/01/36466738/us-stocks-set-to-open-weaker-as-traders-eye-key-main-street-events-analyst-sees-buying-opportunity-">started 2024 with sobering losses</a> that appeared to reflect the <a href="https://www.benzinga.com/news/24/01/36458551/hamas-deputy-leader-killed-in-suspected-israeli-drone-strike-in-beirut-oil-prices-fall">darkening geopolitical outlook</a>.
There were some heavy losses across Asia on Tuesday — particularly in China, where weak home sales data undermined the property sector. In the U.S., the mega-cap Dow Jones Industrial Average eked out narrow gains, but both the S&amp;P 500 and NASDAQ indexes lost ground.
The SDPR S&amp;P 500 Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), the exchange traded fund that tracks the S&amp;P 500 fell 0.6% on Tuesday and the Invesco QQQ Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NYSE">QQQ</a>) which tracks tech stocks on the NASDAQ 100 fell 1.7%. Premarket trading on both ETFs indicated opening losses on Wednesday.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="650" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/03090258/newplot-13-1.jpeg" alt="" class="wp-image-173318" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/03090258/newplot-13-1.jpeg 650w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/03090258/newplot-13-1-300x300.jpeg 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/03090258/newplot-13-1-150x150.jpeg 150w" sizes="(max-width: 650px) 100vw, 650px" /></figure>
Also Read: <a href="https://www.benzinga.com/news/24/01/36458551/hamas-deputy-leader-killed-in-suspected-israeli-drone-strike-in-beirut-oil-prices-fall">Hamas Deputy Leader Killed In Suspected Israeli Drone Strike In Beirut: Oil Prices Fall</a>
<h2 class="wp-block-heading">Geopolitical Gloom Deepens</h2>
The news from the Middle East and Red Sea were certainly sobering. Maersk (OTC:<a class="ticker" href="https://www.benzinga.com/stock/AMKBY#OTC">AMKBY</a>), the shipping company which last week had decided to resume routes through the Red Sea, suffered another attack by Houthi rebels. U.S. warships engaged with enemy vessels, while Iran sent a cruiser to the region.
It was later reported that Israel<a href="https://www.benzinga.com/news/24/01/36458551/hamas-deputy-leader-killed-in-suspected-israeli-drone-strike-in-beirut-oil-prices-fall"> had killed the deputy leader of Hamas</a> in a drone strike on a building in Beirut, the capital of Lebanon.
This incident, being Israel&#8217;s first incursion outside of Gaza in this conflict, raises concerns about the potential involvement of Lebanese Hezbollah militants and their allies, including Iran and Syria, further intensifying regional tensions.
Yet the market action didn&#8217;t feel like a reaction to geopolitical events. Gold prices fell, as the tradition safe haven asset did not attract spooked buyers. The iShares Gold Trust ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAU#NYSE">IAU</a>) fell 0.2%.
&#8220;Geopolitical tensions remain high but do not seem to be having a direct market influence as both gold and oil are trading lower,&#8221; said Marc Chandler at Bannockburn Global.
<h2 class="wp-block-heading">Equity Losers In Sell-Off</h2>
Looking at the losers on the S&amp;P 500 — including the Magnificent Seven stocks, which all lost between 1% and 5% — and it was a list of the best performers of 2023.
&#8220;I wouldn&#8217;t have been surprised to see profit taking — you&#8217;ve got a lot of portfolio managers who underperformed their index, so they&#8217;re re-orientating their portfolios towards a less hawkish Fed — they need to allocate towards stocks,&#8221; said Tom Lee at Fundstrat, in an interview on CNBC on Tuesday.
The largest downturns on the S&amp;P 500 on Tuesday were seen in the three cruise line operators: Norwegian Cruise Line Holdings (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NCLH#NYSE">NCLH</a>) fell 8.6%, Royal Caribbean Cruises (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RCL#NYSE">RCL</a>) lost 7.2% and Carnival Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CCL#NYSE">CCL</a>) shed 6.7%.
During 2023, only three stocks — including Mag7 giants Nvidia (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) up 227%, and Meta Platforms (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) up 172% — outperformed Royal Caribbean, which gained 128% over the year. Carnival wasn&#8217;t far behind with an annual gain of 98%, while NCLH rose by 47%.
Another big story of 2023 — the growth of artificial intelligence — drove semiconductor stocks to cyclical highs, and many of these stocks were among Tuesday&#8217;s big losers.
AMD (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>) fell 6%, Intel (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/INTL#NASDAQ">INTL</a>) shed 4.9% and Applied Materials (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMAT#NASDAQ">AMAT</a>) lost 4.8%.
<h2 class="wp-block-heading">What To Expect Ahead In 2024</h2>
Premarket trading on Wednesday indicated the likelihood of further equity losses — particularly in the stocks mentioned above. 
But the selling has not been broad based. There were plenty of gainers, particularly in the pharmaceuticals, healthcare and financial sectors.
Capex has risen during 2023, indicating companies feel confident about their earnings growth in 2024 — and earnings will be the ultimate driver, along with Federal Reserve policy, as the year advances.
Thus, the fourth-quarter 2023 earnings season, which kicks off in a few weeks, will be key for investment decision-making as companies provide further details on their outlooks for the coming year.
Now Read: <a href="https://www.benzinga.com/general/entertainment/24/01/36456513/new-year-resolution-stocks-can-getting-fitter-be-a-winner-on-the-stock-market">New Year Resolution Stocks: Can Getting Fitter Be A Winner On The Stock Market?</a>
Photo: Shutterstock

AMAT

INTL

NCLH

NVDA

A Glitch In The Rally? Cruise Operators And Chip Stocks Targeted In Profit Taking

In the opening session of the new year, WTI crude oil prices surpassed $73 per barrel <a href="https://www.benzinga.com/markets">with a 2.6% increase.</a> 
This rally is directly tied to escalating tensions in the Red Sea. The region, a critical global trade conduit, is generating significant headwinds for global equity markets. Major European equity indices are all in the red. U.S. futures are also trading with the minus sign at the time of publication.
What Happened: Over the weekend, a concerning escalation unfolded as U.S. Navy helicopters engaged and destroyed three Houthi boats in the Red Sea, according <a href="https://www.nytimes.com/2023/12/31/world/middleeast/us-houthi-clash.html">to</a> the New York Times.
These boats reportedly attempted to board a container ship, leading to several casualties. Iranian state-run media, IRNA and Tasnim, have reported the deployment of an Iranian destroyer to the Red Sea. 
The Pentagon reported that in just one month, the Houthis have hijacked a container ship and launched over 100 drone and ballistic missile attacks, targeting 10 merchant vessels from more than 35 nations. 
This development poses a risk of further inflaming the already high tensions in the area and potentially undermines Washington&#8217;s efforts to secure this vital trade route. 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true"><a href="https://twitter.com/hashtag/Iranian?src=hash&amp;ref_src=twsrc%5Etfw">#Iranian</a> Navy has dispatched a destroyer to the Red Sea <a href="https://t.co/5UfEU0mULB">https://t.co/5UfEU0mULB</a> <a href="https://t.co/znuGFYL2s6">pic.twitter.com/znuGFYL2s6</a>
&mdash; Tasnim News Agency (@Tasnimnews_EN) <a href="https://twitter.com/Tasnimnews_EN/status/1742047945069826520?ref_src=twsrc%5Etfw">January 2, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="539" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/02095342/MapChart_Map-1-1024x539.png" alt="" class="wp-image-172422" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/02095342/MapChart_Map-1-1024x539.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/02095342/MapChart_Map-1-300x158.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/02095342/MapChart_Map-1-768x404.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/02095342/MapChart_Map-1-1536x809.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/02095342/MapChart_Map-1.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Image:&nbsp;<a href="https://www.mapchart.net/" target="_blank" rel="noreferrer noopener">MapChart</a>
Why It Matters: The Red Sea is pivotal for global trade. The International Chamber of Shipping notes that 12% of global trade passes through this route, linking to the Suez Canal. 
Last week, about half of the container ship fleet that travels through the Red Sea and Suez Canal (accounting for 18% of global capacity) was rerouted. 
This development arises during a period of intensified strife. The news coincides with the ongoing conflict between Israel and Hamas. A series of assaults on ships carried out by groups affiliated with Tehran followed.
Shipping Industry Response And Market Reactions: AP Moller-Maersk A/S (OTCPK: AMKBY), the world&#8217;s second-largest maritime shipping line, temporarily suspended all Red Sea transit for 48 hours. Other shipping giants are also under close scrutiny as shipping costs have spiked significantly over the past month. The SonicShares Global Shipping ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BOAT#NYSE">BOAT</a>), which tracks stocks from companies operating in the global maritime shipping industry, has risen by 11% over the past three weeks. 
Now Read: <a href="https://www.benzinga.com/markets/equities/24/01/36449314/nasdaq-and-s-p-500-futures-dive-oil-heats-up-cryptos-surge-on-first-trading-day-of-2024-unraveli">Nasdaq And S&amp;P 500 Futures Dive, Oil Heats Up, Cryptos Surge On First Trading Day Of 2024: Unraveling Forces at Play</a>
Image: Shutterstock

WTI Crude Oil Prices Soar On New Year's Kickoff As Tensions Escalate In Red Sea Between US, Iran

The escalating disruptions in the Red Sea, caused by attacks led by Yemen-based Houthi rebels targeting ships, have triggered a significant shift <a href="https://www.benzinga.com/topic/geopolitics">in global trade patterns.</a>
Industry data from Flexport Inc., unveiled in a <a href="https://www.bloomberg.com/news/articles/2023-12-28/red-sea-attacks-latest-half-of-container-ship-fleet-avoids-route?srnd=premium&amp;sref=TBDibEcD">Bloomberg</a> story on Thursday, reveals a startling development: around half of the container-ship fleet that typically passes through the Red Sea and Suez Canal is rerouting to avoid the area. 
This shift, involving approximately 300 vessels capable of carrying 4.3 million containers, represents about 18% of global shipping capacity.
<h2 class="wp-block-heading">The Rerouting Challenge</h2>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="700" src="https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28152726/Suez-Map-1024x700.jpg" alt="" class="wp-image-170763" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28152726/Suez-Map-1024x700.jpg 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28152726/Suez-Map-300x205.jpg 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28152726/Suez-Map-768x525.jpg 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28152726/Suez-Map-1536x1050.jpg 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28152726/Suez-Map.jpg 1580w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Image: <a href="https://www.mapchart.net/">MapChart</a>
Rerouting around Africa adds approximately 25% more travel time compared to the usual Suez Canal route, connecting Asia and Europe. 
This not only increases operational costs for shippers but is also likely to inflate consumer prices for a wide range of products, including everyday items like clothing, food, and oil.
The Houthi, originating from Yemen, have justified their attacks as a stance against Israel, which is currently involved in a war against Hamas. 
However, their targets are not limited to vessels with direct Israeli connections, posing a broader threat to international trade. In response, a U.S.-led task force is stepping up efforts to enhance security along this crucial maritime corridor.
The data from Flexport aligns with findings from Kuehne &amp; Nagel International AG (OTCPK: KHNGY), another freight-forwarding giant. Their data, as of Wednesday, showed 364 vessels, with a capacity of 5 million TEUs, rerouting around Africa &#8211; a notable increase from 314 vessels recorded on Dec. 22. Over the past month alone, shares of Kuehne &amp; Nagel International AG have risen by 20%, reaching the highest level since October 2021. 
Clarksons Research highlights the impact of these diversions: a 40% decrease in Gulf of Aden arrivals and a 45% reduction in the Suez Canal southbound transits between Dec. 22 and 26.
<h2 class="wp-block-heading">Market Reactions: Maritime Shipping Stocks Rocket </h2>
Shares of the Danish business conglomerate&nbsp;A.P. Moeller-Maersk A/S (OTCPK: AMKBY), the world&#8217;s second-biggest container line, have risen by nearly 20% over the past two weeks. 
Another industry giant, the German Hapag-Lloyd Aktien (OTCPK: HLAGF) saw a remarkable 40% boost in its share price during the same time frame. 
The Honolulu-based Matson Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MATX#NYSE">MATX</a>) witnessed an 11% rally, similar to the one seen by Global Ship Lease Inc. New (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GSL#NYSE">GSL</a>). 
The SonicShares Global Shipping ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BOAT#NYSE">BOAT</a>), which tracks stocks from companies operating in the global maritime shipping industry, has soared by 10%.
Chart Courtesy of TradingView: Houthi Attacks Fueled Shipping Companies&#8217; Stocks 
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="495" src="https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28123241/BOAT_2023-12-28_17-32-22_c2924-1024x495.png" alt="" class="wp-image-170664" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28123241/BOAT_2023-12-28_17-32-22_c2924-1024x495.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28123241/BOAT_2023-12-28_17-32-22_c2924-300x145.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28123241/BOAT_2023-12-28_17-32-22_c2924-768x372.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28123241/BOAT_2023-12-28_17-32-22_c2924-1536x743.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2023/12/28123241/BOAT_2023-12-28_17-32-22_c2924.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Read now: <a href="https://www.benzinga.com/government/23/12/36328651/end-of-year-rally-for-oil-as-red-sea-tensions-drive-up-shipping-costs">End-Of-Year Rally For Oil As Red Sea Tensions Drive Up Shipping Costs</a>
Photo: Shutterstock

Asia

HLAGF

KHNGY

MATX

Trade Turmoil: Houthi Attacks In Red Sea Ignite Rerouting Crisis, Drive Surging Shipping Stocks

Denmark&#39;s Shipping group,&nbsp;A. P. Moller Maersk A/S&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/amkby#OTC">AMKBY</a>), on Wednesday stated that it has&nbsp;<a class="editor-rtfLink" href="https://www.maersk.com/news/articles/2023/12/27/maersk-signs-mou-with-city-of-yokohama-and-mitsubishi-gas-chemical" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">penned&nbsp;</a>a Memorandum of Understanding (MoU) with the City of Yokohama and Mitsubishi Gas Chemical (MGC) to focus on the development of green methanol bunkering infrastructure in Yokohama, with its 16,000 TEU green methanol-powered container vessels to be delivered since 2024.&nbsp;
In another development, Maersk recently&nbsp;<a class="editor-rtfLink" href="https://www.maersk.com/news/articles/2023/12/15/maersk-operations-through-red-sea-gulf-of-aden" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">stated&nbsp;</a>that it would send vessels through the Red Sea after a U.S.-led coalition offered naval security against attacks by Iran-backed Houthi rebels.
This decision follows the initiation of Operation Prosperity Guardian (OPG), a U.S.-led coalition providing naval security. This development is widely celebrated within the industry as it positively impacts the efficiency and functionality of global trade.
Related:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/23/12/36367992/inflation-warning-for-2024-red-sea-disruptions-causing-freight-rate-spikes-and-higher-costs" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">Inflation Warning For 2024: Red Sea Disruptions Causing Freight Rate Spikes And Higher Costs</a>
On Sunday, Maersk announced the discontinuation of rerouting vessels around southern Africa due to the associated long and expensive journey, as&nbsp;<a class="editor-rtfLink" href="https://www.ft.com/content/4af8ca2f-a34c-42cc-b0f8-8f4d30d35c5c" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">per&nbsp;</a>the FT report.&nbsp;
&quot;With the Operation Prosperity Guardian initiative in operation, we are preparing to allow for vessels to resume transit through the Red Sea both eastbound and westbound,&quot; as per the report.
Instead, the company will opt for the more direct route through the Suez Canal under the protection of the coalition.
The recently revealed multinational operation, announced by the U.S. last week, aims to enhance a naval task force in the Red Sea. Its primary objective is to secure the safe transit of commercial vessels through this crucial global trade route. The Red Sea has been a target for drone and missile attacks by the Houthis, a militia group based in Yemen, posing a threat to maritime traffic.
Price Action: AMKBY shares traded lower by 2.10% at $8.85 on the last check Thursday.
Photo via Company

Shipping Giant Maersk Eyes Development Of Green Methanol Bunkering Infrastructure In Yokohama: Details

While the Federal Reserve&#8216;s <a href="https://www.benzinga.com/economics/macro-economic-events/23/12/36360990/feds-favorite-inflation-gauge-cools-more-than-expected-cementing-rate-cut-expecta">preferred measure of inflation</a> is now close to its target range of 2%, the current turmoil in the Red Sea could give U.S. policymakers a few headaches <a href="https://www.benzinga.com/news/large-cap/23/12/36365515/oil-prices-bag-second-straight-week-of-gains-on-red-sea-turmoil-but-theyre-still-off-more-than-15-">in the coming months</a>.
On Friday, data showed the headline rate of personal consumption expenditures, an inflation measure used by the Fed in setting policy rates, fell to 2.9% in November.
Some economists are predicting up to four quarter-point rate cuts in 2024 — that would take the Fed funds rate from its current range of 5.25%-5.5% down to 4.25%-4.5% by the end of next year. Are they being over-optimistic given the potential inflationary impact of the suspension of freight through the Red Sea?
<h2 class="wp-block-heading">Red Sea Traffic Re-Routed</h2>
An increasing number of attacks by Yemeni Houthi rebels have disrupted the Red Sea/Suez Canal corridor.
The shipping route accounts for around 12% of global trade and nearly a third of container shipping. It carries freight from Asia and petroleum products from the Arabian Gulf to destinations in Europe and Eastern U.S. ports.
Many freight companies, including oil tankers and those carrying container goods, have now stopped using it.
The alternative route — around the Cape of Africa — adds 3,000-3,500 miles and an additional 10 to 14 days. It has already driven up freight rates to highs not seen since the Covid-19 pandemic. That&#8217;s likely to have an impact on the price of goods they carry. 
Shipping company Maersk (OTCPK: AMKBY) confirmed a surcharge of $700 on a standard 20-foot container. 
Many other shipping companies have since followed suit.
&#8220;For shippers and eventually also for consumers, 2024 starts with higher than expected freight rates,&#8221; <a href="https://think.ing.com/opinions/avoiding-the-red-sea-leads-to-a-disruptive-start-of-2024-for-trade-and-supply-chains">said</a> Rico Luman senior economist at ING. But will this translate into higher prices?
Also Read: <a href="https://www.benzinga.com/government/23/12/36328651/end-of-year-rally-for-oil-as-red-sea-tensions-drive-up-shipping-costs">End-Of-Year Rally For Oil As Red Sea Tensions Drive Up Shipping Co</a>sts
<h2 class="wp-block-heading">Oil Prices Rise For Two Straight Weeks</h2>
Oil prices have already responded. Since BP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BP#NYSE">BP</a>) is suspending oil shipments through the region. As a result, the price of Brent crude has risen by around 4.6%. 
The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), an exchange-traded fund (ETF) that tracks the price of light-sweet crude, was up 0.9% at $69.68 on the day and up 2.8% over the week.
But it&#8217;s not only the higher freight rates that could have an impact on inflation. The delays caused by the extra distance of shipping goods around Africa could cause temporary bottlenecks in supply chains. 
&#8220;Companies have started avoiding the Red Sea and this already leads to significant delays in supply chains and prices hikes on the spot market — and it could still get worse,&#8221; added Luman.
IKEA is just one of many companies warning that higher freight rates will affect product availability and prices.
An Ikea spokesperson <a href="https://www.nbcnews.com/business/business-news/ikea-says-products-will-delayed-due-red-sea-diversions-rcna130820">said</a> this week: &#8220;The situation in the Suez Canal will result in delays and may cause availability constraints for certain IKEA products.&#8221;
Logistics experts <a href="https://www.msn.com/en-us/money/companies/container-rates-hit-10000-as-ocean-freight-inflation-soars-in-red-sea-crisis/ar-AA1lRtOa">interviewed by CNBC</a> expect that once the timeline hits the one-month mark, inflationary pressures will be felt in the supply chain first; then, ultimately, by the consumer. 
The impact of delays and higher freight prices will be largely felt in Europe. The continent relies more heavily on oil shipped from the Arabian Gulf.
The U.S. should feel any inflationary impact far less due to its diverse economy. It is also broadly self-sufficient in goods, and agricultural commodities, as well as oil.
Now Read: <a href="https://www.benzinga.com/markets/equities/23/12/36361332/uk-on-the-brink-of-recession-while-us-growth-remains-robust-fed-doves-to-drive-markets-in-early-">UK On The Brink Of Recession While US Growth Remains Robust: Fed Doves To Drive Markets In Early 2024</a>
Image: Shutterstock

Inflation Warning For 2024: Red Sea Disruptions Causing Freight Rate Spikes And Higher Costs

A.P. Møller - Mærsk A/S (AMKBY) Q3 2024 Earnings Call Transcript

AP Moller Maersk ( ($AMKBY) ) has released its Q3 earnings. Here is a breakdown of the information AP Moller Maersk presented to its investors. A.P...

A.P. Moller – Maersk Posts Strong Q3 2024 Results

Barclays raised the firm's price target on AP Moller Maersk (AMKBY) to DKK 8,750 from DKK 8,500 and keeps an Underweight rating on the shares. Publ...

AP Moller Maersk price target raised to DKK 8,750 from DKK 8,500 at Barclays

JPMorgan raised the firm's price target on AP Moller Maersk (AMKBY) to DKK 9,000 from DKK 8,575 and keeps an Underweight rating on the shares. Publ...

AP Moller Maersk price target raised to DKK 9,000 from DKK 8,575 at JPMorgan

In a report released yesterday, Marco Limite from Barclays maintained a Sell rating on A.P. Moeller Maersk A/S (0O77 – Research Report), with a pri...

A.P. Moeller   Maersk A/S (0O77) Receives a Sell from Barclays

M&A deals roundup: AbbVie, Blackstone, Take-Two Interactive and more

Morgan Stanley lowered the firm's price target on AP Moller Maersk (AMKBY) to DKK 14,500 from DKK 14,800 and keeps an Equal Weight rating on the sh...

Comments

A P Moller Maersk

A P Moller Maersk (AMKBY) Options

No option chain data available. Please try again later

Popular Channels

Tools & Features

Partners & Contributors

About Benzinga