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Educational Resources

By Bill Hornbarger, Chief Investment Officer

Three Things to Know

  • The Federal Housing Administration (FHA) which insures nearly 8 million high-risk mortgages, reported that the delinquency rate of its mortgages rose to 17.5% in February, up from 17.0% in January, matching the all-time records of September and November last year. The delinquency rate exceeded 20% in 30 of the 169 largest Metropolitan Statistical Areas, topping out in the metro of Nassau County-Suffolk Country, NY, at 24.8%. Among those 30 metros with 20%+ delinquency rates were four metros in Texas, four metros in Louisiana, three metros in New York, three metros in New Jersey, and two metros in Pennsylvania. (Source: Wolfstreet.com)
  • With the Suez Canal impassable, more cargo ships are taking the longer, more dangerous route around the southern tip of Africa. Estimates are that the blockage is costing approximately $10 billion per day in commercial losses. (Source: New York Post)
  • Shipping companies have concerns over the potential for increased piracy activity as more shipping diverts around the southern tip of Africa. Somali pirates have turned to the Somali public for financing. These days, pirates are funded by investors who buy shares at a pirate stock exchange. The stock exchange is well organized with over 72 pirate groups (called “maritime companies”) listed. (Source: Listverse.com)

Three Things to Watch

  • All eyes will be on the Suez Canal and the efforts to free the Ever Given. The canal connects the Mediterranean and Red Seas and accounts for as much as 13% of seaborne trade and about 10% of maritime shipments of oil. Allianz, the German insurer, figured for every week the canal was immobilized, it could shave 0.2 to 0.4 percentage points off annual trade growth.
  • Important economic data includes ISM Manufacturing (Thursday) and the employment report (Friday).  The ISM report has been above 50 (indicating expansion) for nine consecutive months and is expected to be strong again with a consensus forecast of 61.4. Non-farm payrolls are forecast to increase 635,000 after rising 465,000 in the previous month.
  • OPEC+ meets to discuss production levels for May. Oil has been steadily climbing this year on renewed economic optimism. It is currently trading at approximately $61/barrel, and peaked in early March at just over $66/barrel.

The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.