Transcript:
Tom Vaughan:
Hello, everybody, welcome to Wednesday. The S&P 500 was up .3%, today. A lot of green on the board today, actually. The NASDAQ was up. There was a lot of good things happening. Earnings that came out today, that started from some of the bigger companies, were at least decent altogether, and I do think that helped to kind of put a little floor in the market, you know, at the beginning of the day.
And then there was a White House press conference talking about trying to solve the supply chain issues, so we basically have big container ships sitting out in the ocean, and then they have to be offloaded, onto trucks, and sometimes on to rail or into warehouses, and the “last mile” type delivery places like UPS and those types of things. So, all of these are issues within the supply chain delivery system that we’re having trouble with, and apparently there are a lot of boats off the coast here in Southern California. Los Angeles and Long Beach are the two big ports there. Apparently about 40% of the volume of product that comes into the US comes through those two ports. And so what they were talking about today was essentially establishing the Amazon model.
So, Amazon got slammed at the beginning of the pandemic, because everybody started shopping online because, they couldn’t go to the store. And they couldn’t keep up. And I remember deliveries being pretty delayed for quite a while there. And they moved to a 24/7 model, where they just are working around the clock, they have different shifts, and seven days a week, and I’ve seen deliveries come on Sunday, and so that’s why that’s happening. And they want to start doing that with the ports, and apparently Long Beach has already started that. They’re trying to get Los Angeles into a spot where they can get to a 24/7 delivery. And UPS, Federal Express, Walmart, etc, have all agreed to go to a 24 seven process also. So they’re just trying to speed up this delivery of these products, especially as we head here into the Christmas season.
But here’s the most important thing, if you really think about it, and you look at what’s happening, one of the biggest reasons this is happening is because there’s this ginormous amount of demand. People are coming in and buying and buying. And we saw the same types of product shortages and inflationary pressures, after World War II and World War I. And again it’s the same thing: production had been removed and moved to something else, in that case World Wars. In our case, the pandemic in this time. And then as everybody comes back, and there’s this pent up demand to buy, and there’s a lot of money on the sidelines, it takes a while for the whole process to catch up, so that’s where that 24/7 would come into play to kind of allow that to happen.
And the market started to move on that too. And I think that’s a really big deal. It still doesn’t answer the labor issue. You know, it’s one thing to say, “Hey, we want to open up 24/7”, but then you got to get drivers, you got to get dock workers, or whatever it is that you’re trying to fill. And that’s not been easy, actually to get to get everybody in there. So you know, we’ll see how that plays out on the labor side, which may be the harder side to deal with.
But I think it’s really a great movement in the right direction as far as that goes. So very fascinating to see what’s gonna happen. We also saw today, Social Security was increased for the Cost of Living increase was announced today at 5.9%, which is of record going back 40 years. It’s a huge gain, actually. So that’ll start next year so kind of exciting. So anyway, I look forward to talking to you tomorrow and see what happens. Thank you very much.