Over the past week the Dow lost about 0.6% but continued to hover just below the all time high set the prior week. On Monday the Dow pulled back 12 points to finish at 36,087 on lower trading volume. Both IBD and BTS continue to list markets in rally mode and at BTS they are thinking it will stay that way through the end of the year although you never know for sure. Interest rates have started to creep higher and market gurus are expecting two Fed rate hikes in 2022 coupled with persistent inflation which could add uncertainty to market action.
The Economy and Earnings
The Labor Department’s producer price index jumped like a frog last month bolting higher by 0.6% and translating into a year over year increase of 8.6% which is the highest annual increase in over 11 years. Consumer price inflation was also well above expectations rising 6.2% which is the highest level in 31 years. On the demand side, consumers are flush with cash while on the supply side there are shortages in labor, trucking, chips and rising energy costs but hey…. this is all transitory….right?
DoorDash, the money losing food delivery service from San Francisco, announced it was going to purchase Finland based food delivery service Wolt Enterprises OY for about $8 billion in Yankee greenbacks. The gurus are viewing this deal as an effort by food delivery companies to hit scale and thus turn a profit but my question is: “When can we start ordering lutefisk?”
Question of the day: What is worth $140 billion and has no sales? If you answered EV truck maker Rivian, you would be correct. Rivian came public in what was the biggest IPO of the year last week. The company priced 153 million shares at $78 per share giving it an initial market value north of $90 billion making it the eighth largest automaker in the world ahead of Nissan, BMW, and Ford. The company plans three products. One being its signature truck, another a midsized SUV and the third being a delivery van for Amazon. It hopes to deliver 150,000 vehicles next year but as of the IPO date it has delivered only 1,200 trucks mostly to employees.
Items of Interest
The scouts had our fall court of honor yesterday in the park and in the rain. It was the shortest court of honor I have ever attended. It was amazing to see how many people were there considering the conditions. The flags were flying in the breeze and umbrellas were inverting on a regular basis and everyone had a good time.