8 February 2021

1) Ford Motor Company reports quarterly loss of $2.8 billion dollars, amid increases in investment in electric vehicles. This is a larger than expected quarterly loss, but Ford’s stock traded higher as Wall Street focused on the auto maker’s renewed push toward autonomous and electric vehicles. Their sales fell to $36 billion from $39.7 billion a year ago. Ford increased its commitment to invest in growth, with plans to spend more than $22 billion dollars in electric vehicles and $7 billion in autonomous vehicles. This investment in EVs is nearly double an earlier allocation. In the fourth quarter, Ford began U.S. sales of its all-electric Mustang, the Bronco Sport and 2021 F-150 pickup. These vehicles, alongside the return of the Ford Bronco this summer, are expected to be significant contributors to 2021.

2) Another looming uncertainty for the world automotive industry is the global shortage of automotive microprocessors. Subaru has already suspended operations for two days because of shortages. The company expects to lose 48,000 units of production in this fiscal year to March 31 because of the electronic shortages. The semiconductor shortage is bad! Subaru said that they don’t know how long this impact will last. Also Fiat Chrysler and Jeep are also limiting production because of the chip shortage and weak demand. German car makers (Mercedes-Benz maker Daimler and Volkswagen’s Porsche) are considering building up semiconductor stockpiles, to prevent a repeat of the crippling chip shortages that brought assembly lines to a standstill and stalled the production of hundreds of thousands of vehicles worldwide. A few weeks after a German official sent the Taiwanese government a letter asking for help on the semiconductor issues, Taiwan claims to have not received it.

3) China’s unconventional weapons are reportedly winning the Middle East. China has mastered the art of slowly and meticulously shaping the conditions for its interactions with the United States, gaining an advantage. From a military perspective, the Chinese have diagnosed America’s strategic reliance on conventional overmatch in order to deter major conflict. Instead, they have sought to achieve their objectives through unorthodox approaches that limit the effectiveness of our preferred conventional toolkit.

4) Stock market closings for – 5 FEB 21:

Dow 31,148.24 up by 92.38
Nasdaq 13,856.30 up by 78.55
S&P 500 3,886.83 up by 15.09

10 Year Yield: up at 1.17%

Oil: up at $57.07

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