Written by: Mike Simonato, Ontario Presenter: “Investing for the Long Term, presented to the Feb. 6, 2021 International Online Forum, you can watch by CLICKING HERE.
I hope everyone is staying safe and managing to cope with the insanity that persists. Here are some things I witnessed either personally or in the news this week that could affect the economy and thus trading:
The supply chain disruptions continue. Chip shortages are affecting more and more industries/ sectors from car and truck manufacturing to computers/ cell phones and even bank cards. This is causing more and more companies to follow the example of Apple and start making their own chips. It was highlighted this week that this has caused Used vehicles to cost more than new vehicles causing all kinds of issues. Dealers in the states are buying all the used cars in Canada because with the exchange rate they can clean up which they say will cause major problems going forward for Canada. If that wasn’t enough, now they’re saying a number of factors are creating what is called a rubber apocolypse, meaning good luck in getting winter tires this year as well as anything that contains rubber.
This is Ontario but I’m sure we aren’t the only ones going through this. During Covid, many people were working from home and thought this could be permanent so they fled high-priced cities and fled to smaller towns for better quality of life and cost of living. Here’s how this has worked out. Now everyone is being called back to the office. The only problem, nobody lives anywhere near the office anymore. Wall Street all moved to Florida. Let’s just say the response to being forced back to the office is being met with strong resistance and anger. The result, many are flat out refusing to go back or other companies are poaching top talent by saying come work for us as we can offer a flexible work schedule. This situation not only affects companies losing workers but also, for example, downtown Toronto even though things are starting to open back up the fact that the office towers are still mainly empty the restaurants and businesses still don’t have the customers needed to survive. I talked to a young lady last night from Toronto who said it’s unreal the number of businesses all boarded up. A major problem still affecting all businesses is the lack of good workers. Every single business has said the same thing “We can’t find enough good workers”.
I talked to a number of different businesses the last 2 weeks and everyone has said the same thing, business has really slowed down. This includes a big reno company. They showed the numbers last night and since moving to stage 2 of the opening, Hair Salons are the only ones with a huge spike in business.
All around the world many counties are facing serious situations from spiking Covid numbers from the Delta variant, causing many to go back into lockdowns. to Lebanon that can’t get needed medicine and is dealing with serious power outages. We have to remember many of these countries affected supply us with products and services we need ie Rubber and Semi-Conductor Chips
Lastly we know when we come out of this the world will be a different place. We saw an example with Wells Fargo this week saying ALL Lines of Credit are no more as well as no more auto loans etc. The doing away with the lines of credit of course will affect all their customers Credit Scores. There will be more things like this in the future for sure.
Finally, under You Can’t Make This Up, as many of you know I have gone through quite an ordeal the last 6 weeks. A few years back Insurance companies added a clause under the Terms Of Agreement that stated if you make a claim they have the right to demand repayment of any money paid out. While I was aware of this clause I didn’t take it too serious (Big Mistake) I found out that even though I’ve gone over 40 years without so much as a speeding ticket, my insurance was going from just over $900 per year to approx $2,000 per year for at least the next four years. It was explained to me that because of the accident I went from a 6-star rating to a 2-star rating. Here’s the Good Part. I still got the “Experienced Safe Driving Discount” Like I said, You can’t make this up.
As always, nothing more than my 2 cents and I hope it’s of value and interest
Now for the Markets:
DOW JONES: 4 touches at resistance but lower low
NASDAQ: Big drop Thursday but nice recovery Friday. Still looking Strong
S&P 500: Similar to the Nasdaq but stronger. (Now you know why Bob Turnbull trades the Nasdaq and S&P $$$)
MKT TIMING: Sold off during the week but nice recovery Friday but still below the high
READ Views Strategy Urging Caution (3 days of all red lights this week before Friday’s recovery)
PTSE: Stuck at Resistance the last 4 weeks RT Below the channel
VENTURE: Stuck in a channel and still below the 79 SMA
MKT TIMING: Price stalled this week
READ Views (Stan continues to amaze) Strategy Bearish Divergence ADV/ Dec and Consumer Confidence took a big hit this week
Europe: Read Views Strategy Bearish Divergence
BRITAIN: Read Views Strategy Bearish Divergence
AUSTRALIA Could get a C/DN on Monday
Summary Ride the Bull until he kicks you off but remember, Bull Riding isn’t for the faint of heart and when he throws you, it could hurt.