DECEMBER 2023

WHATS NEW?

Good Morning, Good Evening, and Goodnight,

Welcome back to another market update, in this journal I’m going to talk about the supply chain events in a retrospect of this month and a reflection of the year. The sole purpose for me to do this is to spark a conversation with you in the future and maybe gain perspective of your thoughts and strategies.

“Passion is the currency of progress. Invest in your fire and watch the world blaze with possibility.”

In this journal I’m going to Daiiv into supply chain updates, market insights, and innovations. This is an EOY (End of Year) journal, as well as an outlook for next year. This year tested our patience, resilience, and Netflix subscription limits. But hey, we made it!

Warning: market talk ahead. Side effects may include confusion, excitement, and the sudden urge to check your portfolio every five minutes.

SUPPLY CHAIN EOY RECAP

PMI: From Stagnation to Expansion? The narrative has shifted! Manufacturing PMI fell to 48.2 in December 2023, the lowest in four months, compared to 49.4 in November, signaling a contraction of the manufacturing sector after a brief expansion. 

Crude Calm Amidst Global Turmoil: Oil prices, after their October frenzy, have recently been recorded at $71.02 for WTI Crude.  This fluctuation could impact inflation and provide challenges to businesses and consumers, potentially affecting the PMI’s trajectory. 

Tech Triumph: AI Fuels Supply Chain Efficiency: The tech trend continues! Adoption of AI and machine learning in supply chains continues to accelerate yielding tangible results in cost reduction, faster deliveries, and improved inventory management. This tech-driven optimization is a promising trend for businesses navigating the volatile economic landscape. 

Automation: Automation is being used to streamline supply chain processes and reduce costs. Robotics, drones, and autonomous vehicles are being used to automate tasks such as picking, packing, and shipping. Amazon has excelled this year with automated work and robotic assistance in their WMS (Warehouse-Management Systems). 

Blockchain: Blockchain technology is being used to improve supply chain transparency and traceability. It can help reduce fraud, errors, and delays, and increase efficiency and trust between supply chain partners. According to a report by PwC, blockchain technology has the potential to boost the global economy by $1.7 trillion in the next decade.
($IBM, $MSFT, $NVDA are all in the race to build the world’s first quantum computer and are invested in developing a blockchain that would change the way of transactions forever.)

In conclusion, blockchain technology has the potential to revolutionize various industries, but the crypto market has been volatile in the past year. The success of blockchain technology and cryptocurrencies is dependent on various factors, including government regulations, adoption rates, and technological advancements.

FEDERAL RESERVE 

2023: The Federal Reserve spent the year grappling with an unwelcome guest: high inflation

• Hiked interest rates aggressively, with seven increases totaling 4.25 percentage points. This aimed to cool down the economy and dampen demand, ultimately reducing inflationary pressures.
• Reduced their balance sheet, selling down trillions of dollars in assets acquired during the pandemic. This further tightened the money supply and aimed to curb inflation.

The results? Mixed. Inflation has come down from its peak but remains well above the Fed’s target of 2%. The economy has slowed, but a recession is not yet inevitable.

But amidst these fearful environments everyone is in the pool…

2024 Outlook: The Fed’s dance with inflation continues. Here’s what to expect:

• Interest rates: The pace of hikes is likely to slow, with maybe two or three smaller increases throughout the year. The Fed wants to avoid overshooting and triggering a recession. Rate cuts are penciled in for March of 2024.
• Geopolitical tensions: The war in Ukraine and other global factors could disrupt energy markets and reignite inflation pressures.
• Labor market: Continued strong job growth could keep wage pressures high and inflation sticky.
• Consumer confidence: If consumer spending tumbles due to higher costs, it could tip the economy into recession.
• The bottom line: The Fed’s plan for 2024 is to cautiously navigate the tightrope between fighting inflation and avoiding a recession.

To my readers: I started these journals as a hobby during the second half of this fiscal year. I can’t express to you my gratitude I have for those of you that read these journals. Not only did I learn more about supply chain, economics, and freight. But writing has let me express my ideas and thoughts turning into insightful conversations. I had the opportunity to understand the real world of business by trading in the markets, investing in real estate, freight market, as well as ventures I have decided to pursue for coming New Year!

I would like to thank you all once again and look forward for our next conversation!

Merry Christmas and Happy New Year!

Sincerely, 
Daivik Suresh 

Sources

Manufacturing PMI

Automation
PWC and Blockchain

Federal Reserve

Written by:

-DAIVIK SURESH-