Wall Street Breakfast: Santa's Early Start

Santa's early start - The Port of Los Angeles, one of the busiest ports in the country, will begin operating 24 hours a day and 7 days a week to ease cargo bottlenecks that have led to shortages and higher consumer costs. While the neighboring Port of Long Beach, Calif., also started doing a 24/7 schedule last month, major ports in Europe and Asia have operated around the clock for years. The latest change was announced by the White House as it seeks to alleviate supply chain issues ahead of the holidays, though the increase in capacity will require cooperation from major U.S. companies like Walmart (WMT), FedEx (FDX) and UPS (UPS).What happened? The root of the problem goes back to the beginning of the pandemic in spring 2020, when consumer demand slumped and shipping lines canceled sailings between Asia and North America. When demand came back in the summer, there were thousands of empty containers stuck in the U.S., and by the fall of 2020, the West Coast freight networks were bursting at the seams to handle the surge in imports. A wave of COVID-19 cases in Southern California over the winter exacerbated the issue by causing a labor crunch, with docks, warehouses and truckers that handled the cargo unable to find enough workers.Companies like Amazon (NASDAQ:AMZN), Target (NYSE:TGT), Pottery Barn (NYSE:WSM), Ulta Beauty (NASDAQ:ULTA) and Gap (NYSE:GPS) are even offering discounts - or starting holiday advertising - six weeks before Black Friday. The goal here is to stretch out the year-end shopping season, as supply chain challenges could leave them with empty shelves closer to the holidays. The firms also have a load of goods that they brought in early, but with limited warehouse space available, they need consumers to buy the stuff to top off their cash balances.Stats: According to a RetailMeNot survey of almost 1,100 consumers, 37% of shoppers began their holiday shopping between August and September (if not earlier). Another 22% said they would start shopping in October, while 24% planned to begin in November ahead of Thanksgiving. Americans are expected to spend about $1.3T this holiday season, per the latest forecast from Deloitte, marking a 7% to 9% increase over last year.

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Top News Santa's early start Shutterstock The Port of Los Angeles, one of the busiest ports in the country, will begin operating 24 hours a day and 7 days a week to ease cargo bottlenecks that have led to shortages and higher consumer costs. While the neighboring Port of Long Beach, Calif., also started doing a 24/7 schedule last month, major ports in Europe and Asia have operated around the clock for years. The latest change was announced by the White House as it seeks to alleviate supply chain issues ahead of the holidays, though the increase in capacity will require cooperation from major U.S. companies like Walmart (WMT), FedEx (FDX) and UPS (UPS). What happened? The root of the problem goes back to the beginning of the pandemic in spring 2020, when consumer demand slumped and shipping lines canceled sailings between Asia and North America. When demand came back in the summer, there were thousands of empty containers stuck in the U.S., and by the fall of 2020, the West Coast freight networks were bursting at the seams to handle the surge in imports. A wave of COVID-19 cases in Southern California over the winter exacerbated the issue by causing a labor crunch, with docks, warehouses and truckers that handled the cargo unable to find enough workers. Companies like Amazon (NASDAQ:AMZN), Target (NYSE:TGT), Pottery Barn (NYSE:WSM), Ulta Beauty (NASDAQ:ULTA) and Gap (NYSE:GPS) are even offering discounts - or starting holiday advertising - six weeks before Black Friday. The goal here is to stretch out the year-end shopping season, as supply chain challenges could leave them with empty shelves closer to the holidays. The firms also have a load of goods that they brought in early, but with limited warehouse space available, they need consumers to buy the stuff to top off their cash balances. Stats: According to a RetailMeNot survey of almost 1,100 consumers, 37% of shoppers began their holiday shopping between August and September (if not earlier). Another 22% said they would start shopping in October, while 24% planned to begin in November ahead of Thanksgiving. Americans are expected to spend about $1.3T this holiday season, per the latest forecast from Deloitte, marking a 7% to 9% increase over last year.       Central Banking Tapering timeline Fed officials signaled last month that they should start reducing emergency pandemic support for the economy in mid-November or mid-December, according to the latest FOMC minutes. The program could then end by mid-2022, though several participants said they'd prefer quicker pace of reducing purchases. Keep in mind that the central bank is currently purchasing at least $80B per month of Treasury securities and at least $40B per month of MBS. What it means: "A number" of FOMC officials said they believed that the test of "substantial further progress" toward maximum employment had been met. That's important because most Fed members also believe that the price stability requirement had already been fulfilled. Central bankers are looking for both of the standards to be met before the Fed reduces its rate of asset purchases. "We still think November, but one month isn't going to matter to markets at this point," noted Lawrence Gillum, fixed income strategist for LPL Financial. "There was some interesting discussion on lift-off though and it looks like the Committee remains divided. The future make-up of the Committee only adds uncertainty to when lift-off will actually take place." Wild card: While the inflation outlook was raised in the near term after much discussion, Fed staff continue to predict the recent acceleration is "transitory." CPI data on Wednesday showed headline prices rising by 5.4% Y/Y in September, marking the fifth consecutive month of annual increases of 5% or more. However, stocks continued to climb during the session as traders appeared to spend much of the last few weeks positioning themselves for a flaming number. (43 comments)       Sponsored By VantagePoint How Pro Traders Actually Pick Their Stocks When a stock skyrockets, we are all eager to see if it will continue to push higher or reverse course. And there is one way to know what's coming next, but it isn't what you think. The pros have been using it for decades to pick their winning stocks. It's the only guaranteed way to get answers and doesn't involve any research. Check out this must-see tool for predictive analysis. Covid Mix and match A new study has found that individuals who received a COVID-19 booster shot that was from a different manufacturer than the original series had significantly increased neutralizing antibody titers. The findings, conducted by the National Institutes of Health, examined individuals who had initially received either the Pfizer-BioNTech (PFE, BNTX), Moderna (MRNA), or Johnson & Johnson (JNJ) vaccine and then received a booster with one of the other jabs. By the numbers: For participants who received the same vaccine for the initial course and booster, neutralizing antibody titers increased 4.2-20-fold. Individuals who received a different booster saw titers increase 6.2-76-fold. The results, which were published on medRxiv, have yet to be peer reviewed. For the record, the CDC has recommended that individuals receive a booster shot from the same manufacturer and the primary series. Pfizer's booster has also been the only one authorized by the FDA. Elsewhere: The World Health Organization is establishing a new panel of scientists to lead an investigation into the origins of COVID-19. Earlier this year, President Biden ordered a similar systematic review, though that probe ended after China "continued to reject calls for transparency and withhold information." Many scientists believe the virus jumped from bats to humans, though a lab leak theory has gained ground after initially being dismissed by many as a conspiracy. (67 comments)       Space Sci-fi becomes reality William Shatner, known to many as Captain and later Admiral Kirk, launched into space yesterday aboard a Blue Origin (BORGN) New Shepard rocket, which reached an altitude of 350K feet before parachuting back to Earth. At the age of 90, the Star Trek actor is the oldest person to ever fly into space. Looking ahead, SpaceX (SPACE) is also prepping to launch three private passengers, who each paid $55M to fly to the International Space Station in 2022. Bigger picture: Having Shatner on board brought star power to Bezos space tourism enterprise, given its appeal to baby boomers, industry watchers and space enthusiasts. Analysts also say the attention is incrementally positive in bringing attention to the space sector and space-related stocks like Virgin Galactic (SPCE), Redwire (RDW), Iridium Communications (IRDM), Rocket Lab (RKLB), Astra Space (ASTR) and Spire Global (SPIR).

"You have done something," Shatner told Jeff Bezos, founder of Amazon (AMZN) and Blue Origin, after emerging from the capsule. "What you have given me is the most profound experience. I hope I never recover from this."

Outlook: Congress has restricted the FAA from regulating the safety of commercial space flights since 2004 to help the sector develop without heavy compliance costs. The policy has been extended several times over the years and now runs until 2023. Crews today fly under a regime known as "informed consent," meaning potential astronauts take on similar risks to skydivers and bungee jumpers. Companies are fighting for share in a space market that will triple in size to more than $1T in annual sales by 2040, according to Morgan Stanley, whose forecast assumes rapid developments in space tourism, moon landings and satellite broadband Internet. (47 comments)

     

Today's Markets

In Asia, Japan +1.5%. Hong Kong closed. China -0.1%. India +0.9%.
In Europe, at midday, London +0.8%. Paris +0.9%. Frankfurt +0.9%.
Futures at 6:20, Dow +0.6%. S&P +0.7%. Nasdaq +0.8%. Crude +1.3% at $81.45. Gold +0.4% at $1745. Bitcoin +4.9% at $57396.
Ten-year Treasury Yield unchanged at 1.54%

Today's Economic Calendar

8:30 Initial Jobless Claims
8:30 Producer Price Index
8:35 Fed's Bullard Speech
9:00 Fed's Bostic Speech
10:00 Fed's Bostic Speech
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
1:00 PM Fed's Williams Speech
1:00 PM Fed's Barkin: "Talking About Outcomes"
4:30 PM Fed Balance Sheet
6:00 PM Fed's Harker: Economic Outlook

Companies reporting earnings today »

What else is happening...

Analysts react: JPMorgan (NYSE:JPM) Q3 revenue beat is mostly expense driven.

Russia's Gazprom (OTCPK:OGZPY) is pumping gas from storage to Europe.

U.S. announces plans for seven offshore wind farms by 2025.

Uranium ETFs, stocks rally in bet on nuclear power's resurgence.

Purdue Pharma to resume work on its $10B settlement - AP.

As CRISPR (CRSP) continues to falter, other CAR-T names aren't impacted.

Revival? Cisco (NASDAQ:CSCO) could follow Microsoft (NASDAQ:MSFT) path.

Taiwan Semiconductor (NYSE:TSM) beats consensus, guides above estimates.

Bill Gross sees 10-year Treasury yield rising to 2% over the next year.

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