Big Deal/Reactions may be a Bigger Deal: I was somewhat late to this whole event (it seemed so far away, and there is a lot of news these days), although being handed a pamphlet right off of the plane in Canadian customs last week in Montreal (“Nouveau Coronavirus”) should have been a major clue. Then came meetings cancellations (the first of many?), guidance reductions (or the removal of any guidance), and non-stop news coverage – this is a big deal. How big, or, in this case, how big for rails? The odds of a global and local recession have gone up, of course (and is the Fed’s half-point rate cut the last of the dry powder?). The OECD has halved its 2020 global GDP growth rate estimate (to +1.5). Commodity prices are plummeting; the Baltic Dry Index is down by ~2/3 since the start of the year. The ISM, after a brief bump up in January, is heading downward (February: 50.1). Analyzing its impact in the rails is both simple (volumes, dwell, consumer confidence, auto supply chain) and complicated; analyzing the first quarter as it was intended by the founders (as a snapshot of a company’s progress on implementing its strategy) will, once again, be nigh on impossible.
In general, what impact is the coronavirus outbreak having on the rail industry?
Published March 8, 2020by Tony Hatch - ABH Consultingin Ask The Experts Q&A