{"id":10021,"date":"2021-12-05T23:58:47","date_gmt":"2021-12-05T23:58:47","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=10021"},"modified":"2022-02-26T13:05:37","modified_gmt":"2022-02-26T13:05:37","slug":"supply-chains-improve-but-does-anyone-notice","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/supply-chains-improve-but-does-anyone-notice\/","title":{"rendered":"Supply Chains Improve, But Does Anyone Notice?"},"content":{"rendered":"\n<p>Supply chains and inflation were likely hot topics at\nThanksgiving dinners around the country this year. Most Americans are likely\nnoticing the same things \u2013 higher prices for many goods, labor shortages at local\nbusinesses, more expensive gasoline, etc. Supply chain problems are a key\nfactor driving price pressures, in addition to robust consumer demand tied to a\nstrong labor market, higher wages, and accumulated savings.<sup>1<\/sup><\/p>\n\n\n\n<p>Simply put, there is too much money chasing too few goods\nand services.<\/p>\n\n\n\n<p>Consumer demand seems unlikely to abate significantly in the\nnear future. The jobs market has been improving, wages have been ticking higher,\nand entrepreneurs are starting new businesses at a rapid clip. According to the\nCensus Bureau, applications for 4.54 million new businesses were submitted in\nthe first three quarters of 2021, the most on record and with a 56% leap from\nthe same period in 2019 (before the pandemic).<sup>2<\/sup><\/p>\n\n\n\n<p>__________________________________________________________________________<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_12_06&amp;content=stock_market_outlook_report\">Get Our Key Forecasts in Our Just-Released Stock Market Report!<\/a><\/strong><\/p>\n\n\n\n<p>As supply chain issues improve and the economy shows signs\nof growth, what does this mean right now for investors? <\/p>\n\n\n\n<p>We don\u2019t recommend timing the market and making immediate\ndecisions, but we do want investors to feel confident in their financial choices.\nWhether it\u2019s a matter of research or focusing on data, let us help you achieve\nyour investing goals. <\/p>\n\n\n\n<p>To help you do this, I am offering all readers our\njust-released Stock Market Outlook report. This report contains some of our key\nforecasts to consider such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Zacks rank S&amp;P 500 sector picks<\/em><\/li><li><em>Zacks view on equity markets<\/em><\/li><li><em>What produces optimism?<\/em><\/li><li><em>Zacks forecasts for the remainder of the year<\/em><\/li><li><em>Zacks ranks industry tables<\/em><\/li><li><em>Sell-side and buy-side consensus<\/em><\/li><li><em>And much more<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!\u00a0<br> <strong><br>IT\u2019S FREE.\u00a0<a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_12_06&amp;content=stock_market_outlook_report\">Download the Just-Released December 2021 Stock Market Outlook<\/a><sup><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_12_06&amp;content=stock_market_outlook_report\">3<\/a><\/sup><\/strong><\/p>\n\n\n\n<p>__________________________________________________________________________<\/p>\n\n\n\n<p>That leaves the supply side of the equation \u2013 of goods,\nservices, and labor \u2013 as a key determinant of whether price pressures will ease\nin the coming months or quarters. In my view, we should see improvements across\nthe board relatively soon, but I also expect these improvements to be\nunderappreciated and underacknowledged by investors and the media, at least at\nfirst. And that could be bullish for stocks.<\/p>\n\n\n\n<p>In fact, there are already signs supply chain problems are\neasing, but my guess is that few readers have heard about them. In Asia, energy\nshortages and port capacity limits have eased, and ocean freight rates have\nfallen from record highs. China has resumed manufacturing largely at normal\ncapacity since October. In the United States specifically, major ports are\nstill congested and ships are still waiting to offload goods, but at the same\ntime, major retailers like Target, Home Depot, and Walmart were all\nwell-stocked for the holiday shopping season.<\/p>\n\n\n\n<p>Oxford Economics surveyed \u201ccountry experts\u201d across 45\neconomies and found that nearly everyone believed supply chain disruptions had\npeaked. This assessment does not mean the issues are over \u2013 but it does confirm\nemerging evidence that global supply chain bottlenecks are at least easing,\nwhich could lower logistics costs and allow production to begin catching up\nwith demand. <\/p>\n\n\n\n<p>There is also a distinct possibility that supply shortages\ncould ultimately become supply gluts in the next couple of years. A great\nexample is in the auto industry, where there is a significant amount of partially\nbuilt vehicles parked around the country just waiting for the delivery of\nsemiconductors. Once the chips are installed and the vehicles move into\ndealerships, supply could potentially outweigh consumer demand. Similarly, the\nBank for International Settlements recently noted that many companies are\nestablishing \u2018precautionary stockpiles\u2019 of parts, which could be exacerbating\nshortages. Supply could easily overshoot demand once it catches up.<\/p>\n\n\n\n<p>My point here is not that supply chain and inflation reporting\nis overblown \u2013 there are of course major issues that are creating shortages and\nrising prices. But I think many investors are starting to assume these problems\n\u2013 and the inflation that comes with it \u2013 is more permanent than temporary. So\neven when improvements start to take hold, which I think we are starting to see\nnow, few are likely to notice. And that could be good news for stocks.<\/p>\n\n\n\n<p><strong>Bottom Line for\nInvestors <\/strong><\/p>\n\n\n\n<p>The notion that supply-demand imbalances will persist longer\nthan expected is becoming a widely-held belief. I\u2019m not saying this belief is\nwrong, but I have been starting to notice several, underappreciated\nimprovements to supply chain problems that few people are noting. And anytime a\ngap starts to form between how worried people are and how worried they actually\nshould be, that tends to be bullish for stocks. I think that\u2019s what we\u2019re\nseeing now.<\/p>\n\n\n\n<p>Here at Zacks, we want to help investors overcome these worries and be able to focus on the big picture. To help you stay focused, instead of basing your decisions on fear, I am offering all readers our\u00a0<strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_12_06&amp;content=stock_market_outlook_report\">Just-Released December 2021 Stock Market Outlook Report.\u00a0<\/a><\/strong><\/p>\n\n\n\n<p>This report looks at several factors that are producing optimism right now and contains some of our key forecasts to consider such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Zacks rank S&amp;P 500 sector picks<\/em><\/li><li><em>Zacks view on equity markets<\/em><\/li><li><em>What produces optimism?<\/em><\/li><li><em>Zacks forecasts for the remainder of the year<\/em><\/li><li><em>Zacks ranks industry tables<\/em><\/li><li><em>Sell-side and buy-side consensus<\/em><\/li><li><em>And much more<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!<br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supply chain problems appear to be easing, but investors don&#8217;t seem to notice\u2014and that could be good news for stocks.<\/p>\n","protected":false},"author":3,"featured_media":8874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[63,71],"tags":[],"class_list":["post-10021","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitch-on-the-markets","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=10021"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10021\/revisions"}],"predecessor-version":[{"id":10246,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10021\/revisions\/10246"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=10021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=10021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=10021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}