Supply-Chain Bottlenecks, How Technology’s Reshaped the Markets, and Growing Global Opportunities
May 5, 2021 | FIRESIDE CHARTS
Supply-chain pressures contributed to a surprise pullback in the ISM Manufacturing PMI last month as the cost of goods sold hits a decade+ high and customer inventories drop to a new historic low. Will an historic inflation pattern hold true? And it’s no secret that investors flocked to the market in 2020, sending private sector financial assets soaring, but the trend actually extends much further than that. Is it more evidence of a bubble or just normal evolution in an increasingly technological world? It’s a question that could also be applied to the S&P 500® Index’s market cap… On the global stage, Japanese markets appear undervalued in comparison to their international peers, and European manufacturing seems to be following a similar path to what we’ve seen in the U.S. What will it take to address global supply-chain bottlenecks?
1. U.S. manufacturing, still red-hot, did pull back last month amid shortages of chips and other materials:
Source: The Daily Shot, from 5/4/21
2…And the cost of goods sold continues to climb to the highest levels in over a decade:
Source: The Daily Shot, from 5/4/21
3. Historically, this leads to higher inflation:
Source: The Daily Shot, from 5/4/21
4. Auto dealers and many other customers are estimated to have record low inventories. Who will meet this demand and when? Limited supply and high demand = rising prices…
Source: The Daily Shot, from 5/4/21
5. The well-intended benefits of the extended unemployment program is having an unintended effect: Workers make more on unemployment than they would working. Employers cannot compete with this…
Source: The Daily Shot, from 5/5/21
6. Is this a bubble or merely a reflection on how technology has changed our lives and the economy?
Source: BofA Global Investment Strategy, from 5/4/21
7. Five stocks make up almost a quarter of the S&P 500 market cap. This index is now susceptible to a single company’s earnings miss, anti-trust actions, and other single stock vulnerabilities:
Source: The Daily Shot, from 5/4/21
8. In 1928, many/most Americans did not have cars, landline phones, refrigerators, or even electricity. Post WWII data increases the relevancy of these averages…
Source: The Daily Shot, from 5/5/21
9. There are an increasing number of appealing opportunities around the globe. Here is one that has been out of the headlines for decades:
Source: The Daily Shot, from 5/5/21
10. Europe’s manufacturing is now on par with the U.S.:
Source: The Daily Shot, from 5/4/21
11…With the same supply chain issues:
Source: The Daily Shot, from 5/4/21
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.