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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (7874)

1/9/2024 8:05:28 AM

From: sixty2nds

1 Recommendation

Recommended By
The Ox

Read Replies (1) | Respond to of 10767

The Houthis aren't aiming to boost North American trade

By Ed D'Agostino | January 8, 2023

Global shipping is under pressure.

As I mentioned on Friday, Iran-backed Houthi militants, based out of Yemen, are attacking commercial ships in the Red Sea with drones and missiles.

Source: afr.com

The Houthis claim the attacks support Hamas and punish companies aiding Israel. What they’re really doing is disrupting shipping through the Suez Canal, a critical artery for ships traveling between the Middle East and Europe.

This creates problems for everyone. Typically, around 30% of global container traffic flows through the Suez Canal.

A US-led coalition is fighting back. It includes the UK, Germany, and Japan, among others. Last week, the US Navy sank three Houthi boats after they attacked a Maersk container ship.

Maersk has since pulled its ships out of the region. Oil giant BP, Belgian oil tanker firm Euronav, Norwegian tanker group Frontline, and a long list of other shippers have either paused or rerouted ships during this conflict.

With any conflict, I’m always mindful of the humanitarian element. There are plenty of thoughtful voices commenting on that. My job here at Global Macro Update is to see the macroeconomic implications. That is why I’m writing to you today.

Geopolitical conflicts have dynamic consequences.

As global shipping grows more difficult and dangerous, it also grows more expensive. As of Tuesday, shipping rates for the North Asia-Mediterranean route had more than tripled since early December.

Source: freightwaves.com

Even when the Red Sea situation is under control, which I hope is soon, I don’t see the overall level of geopolitical conflict waning. Remember, the Houthis are relatively minor players in a broader Middle East conflict where Iran pulls a lot of the strings.

Unfortunately, today’s level of global tension could be our new baseline. That is contributing to a realignment of global trade patterns.

Companies are looking to de-risk. And for US companies, that often means reshoring and nearshoring production. It just makes sense to reinforce supply chains by producing and trading things closer to home.

This is the next step in a reshoring/nearshoring megatrend that’s been gaining traction for over a decade.

Pandemic-era supply disruptions accelerated it, prompting more companies to question the value of operating in faraway places like China. They were willing to deal with the complexities of a far-flung supply chain when it was cheap to do business there. But rising labor costs have made manufacturing in China much more expensive in recent years.

Source: TACNA

You’ve likely heard that businesses are moving production of vital products like semiconductor chips and pharmaceuticals back to the US. Others are moving production of cars, appliances, and textiles to neighbors like Mexico, which now offers the second-cheapest manufacturing labor in the world. It also helps that you don’t need to move things made in Mexico via ship.

This is all contributing to an explosion of North American trade that I’ve been following with the Macro Team here at Mauldin Economics.

Earlier this year, Mexico became the top US trading partner. Canada comes in at number two. I expect these trade relationships to keep growing stronger. This is an investible trend, and it is not too late to participate. I’ll share more details about my research on this with you in the coming weeks.

Best regards,

Ed D'Agostino
Publisher & COO
Mauldin Economics

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To: Sun Tzu who wrote (7874)	1/9/2024 8:14:07 AM
From: sixty2nds	1 Recommendation Recommended By Sun Tzu Read Replies (1) \| Respond to of 10767

Good morning Sun TZU, I see you added some QRTEP. Welcome to the club. The Action was crazy yesterday. This might have triggered it... qurateretail.com Qurate Retail, Inc. to Present at the ICR Conference 2024 January 03, 2024 4:15pm EST Download as PDF ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Qurate Retail, Inc. (“Qurate Retail”) (Nasdaq: QRTEA, QRTEB, QRTEP) announced that David Rawlinson, President & Chief Executive Officer of Qurate Retail, will be presenting at the ICR Conference on Monday, January 8th at 11:30 a.m. E.T. in Orlando, Florida. During his presentation, Mr. Rawlinson may make observations regarding Qurate Retail's financial performance and outlook as well as other forward-looking matters. The presentation will be broadcast live via the Internet. All interested persons should visit the Qurate Retail website at qurateretail.com to register for the webcast. An archive of the webcast will also be available on the website after appropriate filings have been made with the SEC. About Qurate Retail, Inc. Qurate Retail, Inc. is a Fortune 500 company comprised of six leading retail brands – QVC®, HSN®, Ballard Designs®, Frontgate®, Garnet Hill® and Grandin Road® (collectively, “Qurate Retail GroupSM”). Qurate Retail Group is the largest player in video commerce (“vCommerce”), which includes video-driven shopping across linear TV, ecommerce sites, digital streaming and social platforms. The retailer reaches more than 200 million homes worldwide via 14 television channels, which are widely available on cable/satellite TV, free over-the-air TV, and digital livestreaming TV. The retailer also reaches millions of customers via its QVC+ and HSN+ streaming experience, websites, mobile apps, social pages, print catalogs, and in-store destinations. Qurate Retail, Inc. also holds various minority interests. View source version on businesswire.com: businesswire.com Qurate Retail, Inc. Shane Kleinstein, 720-875-5432 Source: Qurate Retail, Inc. Released January 3, 2024