Happy Sunday and welcome to our flagship editorial!

It is about this time of the year when we conclude that all year-ahead outlooks have already been blown to smithereens, but what is the major surprise this year?

Back in mid-December, between 5-7% of respondents in the widely renowned fund manager betted on higher interest rates and/or inflation in 2024. This is the kind of consensus that only arises once we are leaning towards the mid-to-late innings of the recession, but the problem is that we are probably not even in a recession (in the US) yet.

Meanwhile, our fair-value assessment of the Freightco container index of 6000$ a box gets more and more aligned with actual pricing (see 1.a) for each that passes and we are yet to see any practical progress in the Red Sea as the Suez is still practically out of use for containers (see 1.b)

Is the market prepared for a wave of goods inflation arriving from the spring and onwards? Let’s have a look at how markets are positioned and where to find value amidst this.

Chart 1.a – Freightco versus US PCE goods inflation

Chart 1.b – The Suez remains effectively closed for containers