Connect with us

Week Ahead: Financial Markets remain fixated with bond market moves and brace for lots of central bank speak

The focus for the upcoming week will stay with the bond market.  Financial markets are worried with how high Treasury yields can go.  Treasuries have declined for seven straight weeks and that has triggered been the primary driver for US dollar strength..

Published

3 years ago

on

The focus for the upcoming week will stay with the bond market.  Financial markets are worried with how high Treasury yields can go.  Treasuries have declined for seven straight weeks and that has triggered been the primary driver for US dollar strength.

Monday is the start of the Bank of International Settlements’ Innovation Summit four-day summit that will have key speeches from ECB’s Lagarde, BOE’s Bailey and the Fed’s Powell.  Must-watch TV will happen on Wednesday when Fed Chair Powell and Treasury Secretary Janet Yellen have their first joint appearance before the U.S House Financial Services committee.  Powell and Yellen will also speak together before the Senate banking panel on Thursday, which should be mostly reaffirmations of the current ultra-accommodative stance with a united defense over the Fed and Treasury pandemic policies.

The key economic releases of the trading week will be the flash PMI readings across the US and Europe on Wednesday and US personal income and spending data at the end of the week.

Will the bond market selloff continue and send the dollar higher?

Emerging Market Central Bank Watchers expecting CNB, SARB, and MNB to keep rates steady.

How much more downside risks remain for oil prices?

Country

US

It is still all about the bond market.  The Fed’s latest decision to end emergency capital relief to banks will make the upcoming Treasury auctions very important.  If bank interest is low, the bond market selloff could intensify.  Eventually skyrocketing Treasury yields, perhaps the 10-year Treasury yield closer to 2.25%, will trigger Fed action.

Now that the Fed has ultra-accommodation on cruise control, investors will need to see strong upside surprises with key data for it to excite markets.  A wrath of economic data will be released, with many traders focusing on the flash PMI readings, final fourth quarter GDP readings, and personal income and spending data.  The PCE inflation readings for February will draw some attention but they are not yet expected to rise significantly.

The biggest short-term risk to the economic outlook remains virus variant risks and this upcoming week could start to show cases are rising across more states.  A handful of states are seeing virus cases increase as the faster spreading variants become the dominant strain and as some states reopen early.

EU

The listless Covid-vaccine rollout in the EU is worrying investors and souring sentiment towards European equities and the euro. The EU has bet heavily on the AstraZeneca vaccine, and reports of serious side effects from the vaccine led to the suspension of AstraZeneca shots by a number of EU members, including heavyweights France, Germany and Italy. The European Medical Agency declared AstraZeneca safe to use on Thursday, and countries that had suspended its use will resume the jabs today or next week. Still, all the negative publicity has caused hesitancy among the non-vaccinated populace, and Europe’s vaccine numbers will have to improve in order to raise sentiment towards European equities and the euro.

On Wednesday, Germany, the Eurozone and France release the services and manufacturing PMIs for March. The Manufacturing PMIs continue to show strong expansion, but the services sector remains in contraction territory, with readings below the neutral 50-level. ECB President Christine Lagarde will speak at an event hosted by the Bank for International Settlements on Wednesday, and any comments from Lagarde about higher bond yields could move the market.

As well, the German cabinet is due to sign off on a 2022 budget plan. On Thursday, Finance Minister Olaf Scholz said that Germany needs to increase debt spending to help tackle the impact of the coronavirus. Sholz said that he is considering a “timely, targeted and temporary” stimulus plan to revive economic growth once the coronavirus eases.

UK

The Bank of England held steady with monetary policy this week, maintaining interest rates at 0.10% and QE at 895 billion pounds. Investors will be interested in next week’s ‘BoEspeak’, which may shed light on the central bank’s plans, in the light of rising bond yields. BoE Governor Andrew Bailey will participate in panel discussions on Tuesday and Thursday. The BoE will release the FPC minutes from the bank’s last policy meeting and the FPC quarterly statement on Friday. On the data front, the UK releases inflation numbers and PMIs for services and manufacturing.

Switzerland

The SNB sets interest rates on a quarterly basis. Interest rates have been pegged at -0.75%, the lowest of any DM central bank. The bank has done its best to make the Swiss franc less attractive to investors, in order to protect exports. However, the markets have largely ignored the negative interest rate, as the Swissie remains an attractive safe-haven asset.

Emerging Markets

Czech Republic  The Czech National Bank is expected to maintain interest rates at 0.25%. The bank has slashed rates since March 2020, when rates were at 1.75%.

South Africa  The South African Reserve Bank’s interest rate stands at 3.5%, where it has been pegged since July 2020. No change is expected at next week’s meeting.

Hungary  The central bank (MNB) is projected to maintain interest rates at a record low of 0.60%, where it has been pegged since July 2020.

China

The rise in US yields, the ongoing crackdown on China big-tech, and a rocky start to US talks in Alaska has seen retail hot money liquidating Mainland and Hong Kong stocks, despite a number of IPO’s about to hit the Hong Kong market. The Shanghai Composite and CSI 300 technical pictures have now moved into bearish retracement territory leaving both markets vulnerable to deeper selloffs in the coming week.

No sign was seen of China’s “national team” intervening on Friday to reverse the sharp falls in both indexes, and if they remain sidelined next week, the selloff could turn into a rout.

China releases its latest Loan Prime Rates decisions on Monday in a quiet data week. No change is expected but the PBOC continues keeping liquidity tight via the repo market. Again, another negative factor for China stocks.

The Yuan has remained stable around 6.5000, limiting the contagion of higher US rates and the Dollar in China and Asian EM as a whole. If the fixings are moved higher next week aggressively, that could all change. The week ahead will be dominated by US treasury yields and their impact on retail equity investors across Asia..

India

No significant data.

The INR has proven invulnerable to US Dollar strength although the Sensex ends the week 3.0% lower. With India forex reserves climbing to the 4th highest in the world, markets appear reluctant to sell the INR and test the RBI. But a deeper US bond selloff next week leaves both the INR and Indian equity markets vulnerable to an EM taper tantrum.

India remains one of the most vulnerable countries to rising US yields and commodity prices due to its weak current account and foreign currency denominated debt.

Australia & New Zealand

No significant data.

A simply stellar week of Australian data and a dovish RBA minutes could not save the Australian Dollar. Markets instead are laser focused on the continuing rise in Australian CGB yields and fears the RBA may have to tighten sooner. The rise in US long yields is having an outsized effect on that equation.

Australian equities are treading water with steeper yield curves and firm commodity prices supporting banks and resources, but weighing on other sectors.banks. The technical charts show the ASX 200 in danger of joining the All Ordinaries in downside correction territory. Both are vulnerable to a weaker Wall Street next week.

Similarly, the AUstralian and New Zealand Dollars gave up all their gains for the week and both have failed to recapture their downside breakout levels. More US Dollar strength and/or higher yields next week threaten both with 200 point moves possible.

Japan

Japan data showed signs of a nascent recovery although inflation remains as elusive as ever. Markets focused on the Bank of Japan meeting which has widened the corridor in which JGB’s can trade, sending yields higher. The BOJ also stated they would only buy Topix-related ETFs going forward, not Nikkei 225-linked ones. Both developments are negatives for the Nikkei 225 into next week with only second-tier data releases. Like other North Asian indexes, the Nikkei 225 is in danger of breaking into downside correction territory in the coming week.

The Japanese Yen has proven immune to both US developments and the BOJ tolerating higher rates, being unchanged around 109.00 the past week. Higher JGB yields could prompt repatriation flows next week pushing USD/JPY lower. However if the pace of US yield rises remains the same, the balance shifts towards USD/JPY rising above 110.00.

Markets

Oil

Crude prices took a big hit after the demand outlook crumbled following Europe’s struggle with COVID-19.  Adding to the selling pressure was a surge in Treasury yields that kept the dollar strong.  The short-term crude demand outlook could deteriorate even further if Europe shows significant vaccine hesitancy.  The risks are growing that Europe won’t have a normal summer and that could drag down jet fuel demand forecasts.

The demand outlook remains strong for the second half of the year, but oil prices could still see some further short-term pain if the virus spread across Europe does not improve.

Gold

Gold is well off the post-Fed highs, but still looking to finish the week on a positive note despite a strong move higher for Treasury yields.  Gold ETF outflows continued for a sixth consecutive week, but the pace is slowing.

The next few months will be very tricky in identifying what will be the primary catalysts for bullion investors. Wall Street will remain fixated on the bond market selloff and recent disdain for technology stocks.  Gold is starting to attract some investors because eventually rising Treasury yields will surely be countered by Fed action.  The S&P 500 index won’t be able to climb higher if mega-cap tech stocks don’t get their groove back and any hesitancy in that trade should trigger some safe-haven flows into gold.

Bitcoin

Bitcoin has been somewhat steady despite a very volatile time on Wall Street.  Institutional interest excitement is somewhat easing and prices appear poised to consolidate.  It seems that only investments over $100 million will only spark some excitement now that Bitcoin prices remain elevated.

Regulatory fears are starting to return, but nothing major appears to be on the immediate horizon, but that could quickly change.

Economic Events and Data: 

Saturday, March 20

-Polish PM Morawiecki will unveil the details of the “New Deal” stimulus plan

–  Spring is here for the Northern Hemisphere and the first day of autumn in the Southern Hemisphere.

Sunday, March 21

– Saudi Aramco reports full-year 2020 results

Monday, March 22

-Bank for International Settlements holds its Innovation Summit through Thursday. ECB President Lagarde, BOE Gov Bailey and Fed Chair Powell will speak

-Richmond Fed President Barkin speaks to the Maryland Bankers Association.

– San Francisco Fed President Daly hosts a virtual discussion on the future of education.

-German Chancellor Merkel reviews current restrictive measures with regional leaders.

-ECB Governing Council member Klaas Knot speaks at Dutch central bank’s annual press conference.

-Swiss National Bank publishes its annual report.

Economic Data:

  • China loan prime rates
  • New Zealand consumer confidence
  • Japan convenience store sales, leading index, coincident index

Tuesday, March 23

– St. Louis Fed President Bullard speaks to the London School of Economics.

– New York Fed President Williams discusses the New York economy.

-Eurex Derivatives Forum Frankfurt 2021 is held virtually. Through March 24.

-Bank of Canada Deputy Governor Gravelle gives a speech to the CFA Society Toronto.

-ECB Governing Council member Villeroy speaks at presentation of the Bank of France’s annual report.

– Germany’s Merkel hosts a summit for CEOs of carmakers.

– Bundesbank President Weidmann, BIS General Manager Carstens and the Fed’s Powell speak at BIS conference.

– BOE Governor Bailey speaks as a pre-recorded panelist on “unlocking investment for net zero”

– Chief Economist Haldane speaks on a panel on an Institute and Faculty of Actuaries webinar

– GameStop reports earnings after the close

Economic Data:

  • US new home sales
  • Italy industrial orders
  • Australia ANZ Roy Morgan consumer confidence
  • New Zealand trade, credit card spending
  • Singapore CPI
  • Japan department store sales, machine tool orders
  • U.K. jobless claims, unemployment
  • Hungary central bank interest rate decision: Expected to keep bank rate unchanged at 0.60%

Wednesday, March 24

– Fed Chair Powell and Treasury Secretary Yellen will speak before the Senate Banking Committee on the quarterly CARES Act report to Congress.

– New York Fed President Williams takes part in a virtual discussion hosted by Syracuse University and Onondaga Community College.

– San Francisco Fed President Daly will discuss her research on equitable growth.

– Chicago Fed President Evans participates in a virtual Q&A hosted by the Japan America Society of Chicago.

– German cabinet is due to sign off on a 2022 budget plan

– EIA Crude Oil Inventory Report

Economic Data:

  • Eurozone Markit services PMI, consumer confidence
  • Major European PMI data: France, Eurozone, Germany, UK
  • Mexico unemployment
  • UK CPI
  • South Africa CPI
  • South Korea PPI
  • Czech Rate decision: Expected to keep Repurchase Rate unchanged at 0.25%
  • Thailand rate decision: No change expected with Benchmark Interest Rate, trade data
  • New Zealand trade
  • Australia preliminary merchandise trade, Markit Australia PMI
  • Japan Bank PMI, PPI

Thursday, March 25

-US congressional hearing with CEOs from Facebook, Google and Twitter.

-EU Leaders Summit with a focus on COVID, industrial policy, and the eastern Mediterranean to relations with Russia.

-ECB’s Lagarde, BOE’s Bailey, ECB Governing Council members Weidmann and Villeroy, Riksbank Governor Ingves and NY Fed President Williams speak on a panel at the BIS Innovation Summit about central bank innovation.

-New York Fed’s Williams speaks to the Urban Core of Syracuse.

– Chicago Fed President Charles Evans addresses the Women in Housing and Finance meeting.

– San Francisco Fed President Daly discusses monetary policy

– Economic Club of New York hosts a webcast with Fed President of Atlanta Raphael Bostic.

-Finance ministers and central bank governors from the Association of Southeast Asian Nations member states are scheduled to meet over the next five days.

-Fed Vice Chair Clarida speaks at the IIF Washington Policy Summit

-ECB publishes its economic bulletin.

Economic Data:

  • US initial jobless claims, Q4 Final GDP
  • Japan Tokyo CPI
  • South Africa SARB Rate decision: Expected to keep Interest Rates unchanged at 3.50%
  • SNB Interest Rate Decision: No change expected with interest rates.
  • Mexico central bank (Banxico) Rate Decision: Expected to keep key rate steady at 4.00%
  • Euro-area flash PMIs
  • U.K. flash PMIs, inflation rate
  • France manufacturing confidence

Friday, March 26

Economic Data:

  • US Personal Income and Spending, wholesale inventories, University of Michigan consumer sentiment
  • Mexico Trade data
  • Germany Mar IFO business climate: 93.4 estimate v 92.4 prior
  • Singapore industrial production
  • Spain GDP
  • South Korea consumer confidence
  • Italy consumer confidence, manufacturing confidence
  • Japan Tokyo CPI
  • Thailand capacity utilization, manufacturing production index
  • Taiwan monitoring indicator
  • China BoP
  • Norway unemployment

Sovereign rating updates:

– Belgium (Fitch)

– Germany (S&P)

– Saudi Arabia (S&P)

– Hungary (Moody’s)

– Sweden (Moody’s)

– European Union (DBRS)

– Sweden (DBRS)

 

Read More

Related Topics:
Continue Reading

Uncategorized

Wendy’s teases new $3 offer for upcoming holiday

The Daylight Savings Time promotion slashes prices on breakfast.

Published

3 hours ago

on

March 8, 2024

By

Daylight Savings Time, or the practice of advancing clocks an hour in the spring to maximize natural daylight, is a controversial practice because of the way it leaves many feeling off-sync and tired on the second Sunday in March when the change is made and one has one less hour to sleep in.

Despite annual "Abolish Daylight Savings Time" think pieces and online arguments that crop up with unwavering regularity, Daylight Savings in North America begins on March 10 this year.

Related: Coca-Cola has a new soda for Diet Coke fans

Tapping into some people's very vocal dislike of Daylight Savings Time, fast-food chain Wendy's  (WEN)  is launching a daylight savings promotion that is jokingly designed to make losing an hour of sleep less painful and encourage fans to order breakfast anyway.

Wendy's has recently made a big push to expand its breakfast menu.

Image source: Wendy's.

Promotion wants you to compensate for lost sleep with cheaper breakfast

As it is also meant to drive traffic to the Wendy's app, the promotion allows anyone who makes a purchase of $3 or more through the platform to get a free hot coffee, cold coffee or Frosty Cream Cold Brew.

More Food + Dining:

Available during the Wendy's breakfast hours of 6 a.m. and 10:30 a.m. (which, naturally, will feel even earlier due to Daylight Savings), the deal also allows customers to buy any of its breakfast sandwiches for $3. Items like the Sausage, Egg and Cheese Biscuit, Breakfast Baconator and Maple Bacon Chicken Croissant normally range in price between $4.50 and $7.

The choice of the latter is quite wide since, in the years following the pandemic, Wendy's has made a concerted effort to expand its breakfast menu with a range of new sandwiches with egg in them and sweet items such as the French Toast Sticks. The goal was both to stand out from competitors with a wider breakfast menu and increase traffic to its stores during early-morning hours.

Wendy's deal comes after controversy over 'dynamic pricing'

But last month, the chain known for the square shape of its burger patties ignited controversy after saying that it wanted to introduce "dynamic pricing" in which the cost of many of the items on its menu will vary depending on the time of day. In an earnings call, chief executive Kirk Tanner said that electronic billboards would allow restaurants to display various deals and promotions during slower times in the early morning and late at night.

Outcry was swift and Wendy's ended up walking back its plans with words that they were "misconstrued" as an intent to surge prices during its most popular periods.

While the company issued a statement saying that any changes were meant as "discounts and value offers" during quiet periods rather than raised prices during busy ones, the reputational damage was already done since many saw the clarification as another way to obfuscate its pricing model.

"We said these menuboards would give us more flexibility to change the display of featured items," Wendy's said in its statement. "This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants."

The Daylight Savings Time promotion, in turn, is also a way to demonstrate the kinds of deals Wendy's wants to promote in its stores without putting up full-sized advertising or posters for what is only relevant for a few days.

Related: Veteran fund manager picks favorite stocks for 2024

Read More

Continue Reading

Uncategorized

Inside The Most Ridiculous Jobs Report In Recent History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In Recent History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the…

Published

3 hours ago

on

March 8, 2024

By

Inside The Most Ridiculous Jobs Report In Recent History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

Read More

Continue Reading

Uncategorized

Shipping company files surprise Chapter 7 bankruptcy, liquidation

While demand for trucking has increased, so have costs and competition, which have forced a number of players to close.

Published

5 hours ago

on

March 8, 2024

By

The U.S. economy is built on trucks.

As a nation we have relatively limited train assets, and while in recent years planes have played an expanded role in moving goods, trucks still represent the backbone of how everything — food, gasoline, commodities, and pretty much anything else — moves around the country.

Related: Fast-food chain closes more stores after Chapter 11 bankruptcy

"Trucks moved 61.1% of the tonnage and 64.9% of the value of these shipments. The average shipment by truck was 63 miles compared to an average of 640 miles by rail," according to the U.S. Bureau of Transportation Statistics 2023 numbers.

But running a trucking company has been tricky because the largest players have economies of scale that smaller operators don't. That puts any trucking company that's not a massive player very sensitive to increases in gas prices or drops in freight rates.

And that in turn has led a number of trucking companies, including Yellow Freight, the third-largest less-than-truckload operator; J.J. & Sons Logistics, Meadow Lark, and Boateng Logistics, to close while freight brokerage Convoy shut down in October.

Aside from Convoy, none of these brands are household names. but with the demand for trucking increasing, every company that goes out of business puts more pressure on those that remain, which contributes to increased prices.

Demand for trucking has continued to increase.

Image source: Shutterstock

Another freight company closes and plans to liquidate

Not every bankruptcy filing explains why a company has gone out of business. In the trucking industry, multiple recent Chapter 7 bankruptcies have been tied to lawsuits that pushed otherwise successful companies into insolvency.

In the case of TBL Logistics, a Virginia-based national freight company, its Feb. 29 bankruptcy filing in U.S. Bankruptcy Court for the Western District of Virginia appears to be death by too much debt.

"In its filing, TBL Logistics listed its assets and liabilities as between $1 million and $10 million. The company stated that it has up to 49 creditors and maintains that no funds will be available for unsecured creditors once it pays administrative fees," Freightwaves reported.

The company's owners, Christopher and Melinda Bradner, did not respond to the website's request for comment.

Before it closed, TBL Logistics specialized in refrigerated and oversized loads. The company described its business on its website.

"TBL Logistics is a non-asset-based third-party logistics freight broker company providing reliable and efficient transportation solutions, management, and storage for businesses of all sizes. With our extensive network of carriers and industry expertise, we streamline the shipping process, ensuring your goods reach their destination safely and on time."

The world has a truck-driver shortage

The covid pandemic forced companies to consider their supply chain in ways they never had to before. Increased demand showed the weakness in the trucking industry and drew attention to how difficult life for truck drivers can be.

That was an issue HBO's John Oliver highlighted on his "Last Week Tonight" show in October 2022. In the episode, the host suggested that the U.S. would basically start to starve if the trucking industry shut down for three days.

"Sorry, three days, every produce department in America would go from a fully stocked market to an all-you-can-eat raccoon buffet," he said. "So it’s no wonder trucking’s a huge industry, with more than 3.5 million people in America working as drivers, from port truckers who bring goods off ships to railyards and warehouses, to long-haul truckers who move them across the country, to 'last-mile' drivers, who take care of local delivery." 

The show highlighted how many truck drivers face low pay, difficult working conditions and, in many cases, crushing debt.

"Hundreds of thousands of people become truck drivers every year. But hundreds of thousands also quit. Job turnover for truckers averages over 100%, and at some companies it’s as high as 300%, meaning they’re hiring three people for a single job over the course of a year. And when a field this important has a level of job satisfaction that low, it sure seems like there’s a huge problem," Oliver shared.

The truck-driver shortage is not just a U.S. problem; it's a global issue, according to IRU.org.

"IRU’s 2023 driver shortage report has found that over three million truck driver jobs are unfilled, or 7% of total positions, in 36 countries studied," the global transportation trade association reported. 

"With the huge gap between young and old drivers growing, it will get much worse over the next five years without significant action."

Related: Veteran fund manager picks favorite stocks for 2024

Read More

Continue Reading

Trending