Equities | Global | Monetary Policy & Inflation
Charts of the Week: Clogged Ports, Open Skies
- By Matthew Tibble
- 2 min read
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Summary
- China’s ports remain clogged.
- Hedge funds are bearish equities.
- Sticky housing inflation impedes CPI reductions.
- We are back to the skies.
Clogged Ports in China
China may be reopening (slowly), but its ports remain jammed. Port waiting time is now 1.7 days, having risen from under half a day before the pandemic to stay above a day from May 2020 onwards (Chart 1). Lockdowns in Tianjin, the gateway to Beijing, are a large contributor of this. It now takes 2.1 days to enter the port. In Shanghai, however, port waiting times have halved since late April/early May.
Hedge Funds Load Up on Bearish Equity Trades
As of Monday, $3.1bn had flowed out of equities WoW as the selloff across equities continued. We remain biased towards short equities. Hedge funds stayed strongly net-short the S&P, Nasdaq, Russell 2000 and Nikkei. Positioning jumped up to roughly neutral in MSCI EM (Chart 2).
We Spend Increasingly More on Housing
A recent NBER working paper argues that our consumer spending habits are changing. We are purchasing fewer transitory goods, like food and clothing, and more ‘price-sticky’ goods and services.
Housing inflation, which is particularly sticky, is one such example. The OER component had a weight of 14.5% in 1983. This has now risen to 24.3% of overall CPI and 30.6% of core CPI in 2022. In April 2022, housing added as much as 2.7pp to headline inflation, far above average (Chart 3), and is expected to continue to rise throughout 2022.
Taking to the Skies
Most of us are returning to the skies. Global flights are at 85% of 2019 levels (Chart 4). And the seven-day moving average of daily flights is above 100,000 for the first time since the pandemic struck. The exception is Beijing and Shanghai, where flight departures remain low despite China’s reopening.