Each month, CAISSA performs an analysis of prevailing global events, assessing their potential influence on our client’s wealth plan. We are diligently having strategic discussions with our portfolio managers, ensuring that our position remains informed and aligned with current market dynamics.

Below, you will find CAISSA’s perspective on these global events.

Collapse of the Francis Scott Key Bridge in Baltimore 

The Port of Baltimore remains closed after a 984-foot-long cargo ship collided with the Francis Scott Key Bridge in Baltimore. 

CAISSA Perspective: The Port of Baltimore is a critical U.S. shipping port, and the collapse of the Francis Scott Key Bridge has now blocked ships from getting in and out. Many carriers have invoked a “Force Majeure,” a provision in their contract designed to free them from further obligation due to extraordinary events beyond their control. This allows them to drop off at an alternate port and terminate their obligation, thus creating additional logistical problems. At a time when global shipping is already stressed due to the Red Sea crisis, we expect this to continue to impact the supply chain and elevate shipping costs. We believe that the Fed will look past any resulting inflationary pressures stemming directly from this event as they deliberate the timing of interest rate cuts. 

House of Representatives Moving to Ban TikTok? 

The U.S. House passed a bill seeking to force ByteDance to sell their U.S. operations to American owners or face a TikTok ban. 

CAISSA Perspective: Concerns over the influence of the Chinese Government on the popular app TikTok has led the U.S. House of Representatives to pass a bill, seeking to force a sale of ByteDance’s U.S. operations. As we get closer to another Presidential election, misinformation and election interference are top of mind for many, making the forced sale and/or outright ban a very real possibility. We believe Meta and Alphabet are positioned well and will stand to benefit the most, as many content creators on TikTok will be forced to move towards Facebook/Instagram Reels or YouTube Shorts. 

European Luxury Good Sales Slowing Down 

Kering recently reported Gucci sales are down 20% year-over-year amid declining Asia transactions. 

CAISSA Perspective: Many investors have become unenthusiastic about owning Chinese equities; however, no one can dismiss the global importance of the Chinese economy and the tremendous growth of their emerging middle and upper class. One of the most popular and “consensus” trades among international investors had been indirectly accessing these consumers by owning European luxury goods brands such as Louis Vuitton Moet Hennesey, Kering (who owns Gucci), Hermes, Prada, and Ferrari. The declining sales from Asia are further evidence that the headwinds in China remain, to the surprise of some that thought which thought the lifting of zero-covid protocols would provide a catalyst for spending.