Hope you have the day off from work and get to chill.
I did not. So I apologize for the entire Newsletter sounding SALTY. Let’s BEGIN!
It doesn't matter what you need, you probably will not be able to get it.
Oh wanna go away for a quick weekend getaway or see a college football or an NFL game.
SORRY!
Better plan that thing one year in advance aka Cancel any thoughts or ideas of a plan you may have previously had. Every where on the supply chain there is some kind of bottle neck and it is affecting everything.
In Fluid Dynamics, we study something called the Venturi Effect
This is basically what is happening in the economy right now.
Think of the tube as the Global Economic System.
The arrows represent the flow of time
Goods are trying to flow from suppliers to you, the consumers. Normally everything goes fine.
Demand can throw tantrums and ask for more stuff at the last second.
Supply, being a great partner, is always willing to meet the demand.
But then a Global Pandemic comes along and well the Honeymoon comes to an end. Things change hella fast.
Demand gives Supply the silent treatment.
Supply does not know what to do so decides to just give Demand, its space. With the expectation that Demand will eventually come back slowly.
Supply is a vet. He has had many Demands in its lifetime. It understands nothing changes overnight so Supply takes its time.
Problem is Supply did not realize that Demand was beginning to get advice from outside sources. World governments decided that they were not about to allow the World Economy completely get obliterated by some dumb virus. So they got to work printing as much money as their various economies needed and then added extra (Jerome Powell still deciding on tapering or not).
Which led to the shortest Recession we have ever seen in the history of EVER. Demand explodes on the exit (imagine when you first hold down the Hose Nozzle after turning on the faucet. That is what happened to Demand with the extra monies)
Demand took the advice from the outside resources and is ready to make up with Supply.
Supply is still processing
Demand decides not only does it want to make up but it also has a surprise for Supply. Demand has a new attitude:
So rather than going to a restaurant, Demand now wants to cook at home (so rather than delivering food to a major restaurant distributor, supply needs to get things to grocery stores)
Rather than going on vacation, Demand wants to make their house into a home (Stores like Wal-Mart and Home Depot are chartering their own ships)
Rather than going shopping, Demand wants everything delivered for more efficiency and to have more “Quality Time” with Supply (UPS, FedEx, USPS, Amazon all running on fumes)
Supply is still operating on old premises and assumptions. (SO MUCH BACKLOG). Because Supply always lags Demand.
Much to the frustration of Demand, who is trying to turn over a new leaf for the better (Never thought about how Supply also has to change to accommodate all the newnesses).
If that whole thing did not confuse you, AWESOME! If it did, check out Kyla’s detailed piece on the entire Supply Chain and Energy Crisis. Or just watch this TikTok.
All of that was just to say, go ahead and start apologizing for all the gifts you will not be getting anyone this year. Cause inflation gonna eat away at all the money you thought you had. The poster child of this is used car prices
Let’s talk STOCKS
October continues to be kind to us. Recovering half off the losses from September.
But don’t expect too much, October historically has not been any better than September in terms of returns. As we are heading to the end of the year, Big Asset managers (who drive much of the market movement) are less likely to take risks. They want those bonuses as the year ends.
Plus there is a combination of things that investors are worried about:
Inflation
Fed Tapering
If there is one thing investors do not like, it is UNCERTAINTY. So expect a bumpy ride for the rest of the year, as the number of unknowns continue to rise. I am so happy the stock market is exciting and nerve racking again. Gives me something to talk about.
It’s the beginning of Q3 Earnings Week. I mean we had companies like Pepsi, Levi, and a few others report last week but meh didn't really care about them. This week we begin fully with the Banks kicking things off. They give us insights into consumer spending trends. We can see how much money people still have saved up and how much more debt people are taking on. This is gonna be important to take note of especially with inflation seemingly hanging around for much longer than expected.
Are people still trigger happy and spending despite the higher costs or has consumers spending changed. From “nice-to-have” to necessities only.
The entire October earnings Calendar:
My heart can rest for one week. Premiership was on International Break. Hopefully when they return Man U will have Marcus Rashford and will have found thieir skill.
I hope you all have A WONDERFUL week. Go subscribe to Rambling Mind Podcast for mid week stock market updates. No thoughtful post on Wednesday (busier weekend than I expected). You can also catch me on TikTok, Instagram, and YouTube everyday.
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Remember GENEROSITY > greed
God bless Each and Everyone of y’all
✌🏾
-Kelechi