Trade groups are warning of continued supply chain and labor issues on a global scale which is causing market volatility to increase. Last week the Dow fell about 1.3% and today it continued trading to the downside closing with a 323 point drop at 34,002. Trading volume was higher. Banks, energy, auto and material stocks did well while shares of tech companies pulled back. IBD has shifted to “market in correction” as big investors begin to hunker down.
The Economy and Earnings
Ford Motors announced a big push into electric vehicles when it unveiled plans to team up with South Korean battery maker SK Innovations and dump $11.4 billion smackers into an electric F-150 assembly plant and battery plant in Tennessee and two more battery plants in Kentucky. The project will put over 11,000 belted men and women to work by 2025 and Bill “Big Daddy” Ford said the project “will usher in a new era of American Manufacturing” and compared it to the Rouge complex in Michigan that Ford built over a century ago.
Tesla reported record deliveries for the quarter as it got 241,300 vehicles out the door. The gurus had estimated they would deliver 218,000 vehicles and the current delivery level is up 20% from the prior quarter.
Speaking of electricity, Europe, India and China are struggling with soaring power prices heading into the winter as coal and natural gas inventories are at multi year lows and the race is on to stock up all while dealing with supply chain issues. Grid operators are asking businesses to conserve energy and governments are rushing to aid the situation and lock in supplies. The word out of China is the CCP is telling power companies to do whatever it takes to secure enough coal, oil and gas for the winter. OPEC+ announced it will add 400,000 barrels per day to output in an effort to meet demand. Russia is laughing all the way to the bank.