The Southern California Port Restrictions Are Affecting Other Areas

Published on

In his Daily Market Notes report to investors, while commenting on the the Southern California port restrictions, Louis Navellier wrote:

Get The Full Henry Singleton Series in PDF

Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q3 2021 hedge fund letters, conferences and more

Retail Sales Surprise

The consumer has the economy’s back. October US retail sales beat forecasts and was the best increase since March, breeding confidence that the Christmas season will be good, albeit some bears believe part of October's positive surprise was consumers doing early Christmas shopping due to concerns of inventory stuck on container ships.  Walmart & Home Depot beat estimates and both forecast a strong Christmas season.  Consumer Discretionary indexes hit new all-time highs.  US factory output also surprised to the upside perhaps an indication that logistics bottlenecks are finally starting to ease.  Combined with the infrastructure bill getting signed yesterday, there’s enough good news to get stocks off to a positive start.

The U.S. economy's GDP growth is forecasted to reaccelerate from an estimated 2% annual pace in the third quarter to a whopping 8.2% annual pace in the fourth quarter according to the Atlanta Fed.  Although the Atlanta Fed can be too optimistic early in a quarter sometimes, there is no doubt the economic growth is reaccelerating.  Believe it or not, inflation is sparking economic growth and there are plenty of indications of inflation lately.

Thanksgiving Chicken

Inflation makes retirement much more difficult.  The poor and middle class are increasingly frustrated every time they go to the gas station or the grocery store.  Due to a turkey shortage, many Americans are going to be eating chicken for Thanksgiving, but the price of chicken has risen as well.  It will be interesting how long consumers will tolerate inflation eroding their wealth.

Port Restrictions

Major ports on the East Coast and Gulf Coast, are suffering from the Southern California port restrictions, which are exasperated by restrictions on what type of trucks can transport containers, which cannot the stacked higher than two containers versus six containers at most other ports.  Even though the Biden Administration has asked the Longshoremen Union to work 24 hours at the Long Beach and Los Angeles ports, the number of containerships stranded off the coast is getting worse, which will just exasperate shortages and boost inflation.

At COP26, the U.S. agreed to stop using fossil fuels for electricity generation by 2035.  Folks, this is not going to happen, since we will still need lots of natural gas in 2035.  The California war against natural gas is stupid.  The federal government declaring to the world that they will stop using natural gas by 2035 is even more stupid.  The Build Back Better bill that includes money to cap natural gas wells leading methane in the Permian Basin that were caused by the Biden Administration’s drilling ban on federal land is beyond stupid.

In this inflationary environment, millions of Americans are pouring money into the stock market seeking higher yields and protection from inflation.  Also notable is that gold is at a 5-month high.  Internationally, the Chinese economy is now in disarray and Europe is struggling with another Covid-19 outbreak.  The truth is as you look around the world, the U.S. is looking better due to higher interest rates, a capitalistic culture, and 50 states that compete with each other for business.

Do you know which under-the-radar stocks the top hedge funds and institutional investors are investing in right now? Click here to find out.

Heard & Notable

A record number of 4.4 million Americans left their jobs in September, accelerating a trend that has become known as the Great Resignation. The number of Americans quitting has now exceeded pre-pandemic highs for six straight months. Source: Statista

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!