Watch global logistics shares for global supply chain signals on coronavirus

Underneath the index value the data tells more stories about where the impact really is. Across regions it’s clear that Asia-Pacific and China (a few of the larger names are pulling the weighted return into positive) are the two regions that are suffering the most which is not a surprise.

When we look at industries we observe that marine shipping and transit services (basically passenger transport by rail) are hit the hardest. So the global supply chain has seen a materially decline in activity also supported by the 83% drop in the Baltic Dry Index since August 2019. While shipping and transit services are flashing some signs of warning here the declines are not catastrophic but we recommend investors to watch these industries for guidance. The overall market cap weighted equity indices are broadly reflecting technology companies which are not living in the same physical world as manufacturing companies.

It’s worth noting that the transportation sector has not been an attractive investment over a five year period delivering less than 9% return while the global equity market has delivered 34%. In our technology-driven society our equity markets are no longer reflecting the underlying manufacturing economy but more a services and software economy.