E Market Briefing For Thursday, Aug. 5

In-sum: 

There are pundits trying to get a clear read on the economy or stocks. The reality is it can't be finessed at the moment. Focusing on GM's demand is not the answer (sales are high, problems exist), Semiconductor demand has been hobbled by fires, floods, COVID and .. demand. Seriously, all of those (GM).

So drops in certain stocks 'now' don't reveal much about the future, however I think they have to be respected at least with an 'eye' on the exits if needed. I'd like to point out that when stocks ignore good news it's often a warning, but I'll exempt the typical good news selling on favorable earnings reports. There still is not a consensus on how heavily COVID / Delta will impact 'actual' earnings it seems, partially because there's understandable resistance among citizenry to contemplate again limiting 'outings', travel or even cruises.

These won't be shutdown presumably, but they will become less 'inviting' with restrictions, so that's going to limit improved profitability. So Royal Caribbean (RCL) wants 100% ship load factors (who doesn't in the industry). They're not going to get it, and of course if one ship has numerous cases (not positive but sick), shares won't drop to the degree I predicted when I called COVID 'WuFlu' early in 2020, but they will be hit. Most such stocks remain off their rebound highs.

We're just focused on a delay in some of the economic revival forthcoming as schools start, parents freak (understandably) as kids go to school with unclear direction as to defending against the virus, and still envision upside that I term 'The Roaring 20's' of this generation, the first part of which is behind.

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Disclosure: This is an excerpt from Gene Inger's Daily Briefing, which is distributed nightly and typically includes one or two videos as well as charts and analyses. You can subscribe ...

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William K. 2 months ago Member's comment

One thing about the integrated circuit (IC Chips) industry is that the production equipment is constantly changing, and always very expensive. In addition, setup time for a production line is long and tedious. Thus a full-speed rush to build additional production might take most of a year. That, coupled with another wave of production lines becoming a bit obsolete at the time when demand was projected to drop, all lead to a lack of production capability that would satisfy the sudden demands.

If there had been a bit more wisdom available then perhaps production capability in the "not quite bleeding edge" technology might have been easily able to produce the parts that were a bit bigger and a previous generation, but still totally adequate for the tasks. Amazing how clear hindsight can be sometimes.

William K. 2 months ago Member's comment

Quite an interesting article.And certainly an "average" that includes a few exceptions is not as informative as would be useful.

And what will that latest version of the WuFlu bring? We can't even guess.

But here is a scary question: What if a significant portion of the world population DOES die?? Say 10% or even 20%???? What effect would that have on the rest?? Has anybody stopped to think about that, even?? Probably it would affect "the market," don't you think??

Gene Inger 2 months ago Author's comment

I have reflected on the 'genocide' concept; as well as the CCP 'possibly' trying to demoralize the American people with this virus.... if it were used in a biowar not inadvertently released. However the outcome can be the same; hence we are in a biowar with the CCP and I emphasize the CCP since the Chinese people also are in the sights of their leadership's 'weapon'. Ideally this would threaten the CCP itself; along with their crackdown on fintech and so on. I'm limiting further comments on this website since there's a rumor I'd like to be compensated at least a bit for my work :). All the best and thanks for commenting; I'll have more comments soon if the virus doesn't do us all in (it almost got me early this year).