To The Moon

Seldom did Dow Jones $DJIA(.DJI)$ decline more than Nasdaq Index $NASDAQ(.IXIC)$, but not in September 20th. $Ford(F)$ 's lowered its Q3 guidance unexpectedly made the whole manufacturing sector collapsed.

Will it be a domino effect?

The company disclosed the previous day ,

Expects to have about 40,000 to 45,000 vehicles in inventory at end of third quarter lacking certain parts presently in short supply

Therefore, the EBIT of Q3 has been lowered to between $1.4 billion and $1.7 billion, verses the market consensus of $3 billion.

In fact, Ford's supply chain management has done a good job since the pandemic, its gross profit margin of 22Q2 reached the highest 14% in recent years. Therefore, the current shortage of parts is indeed an important blow to its performance.

Ford's performed fantastic last year, due to better expectation of electric vehicle business, especially its strong point-pickup truck, which is well received in North America, is expected to be deadline by the end of 2024, with seven electric vehicles on the market.

However, E-Transit, which was originally expected to be listed in mid-2022, has not been listed, and was finally exposed to be listed in 2023. Its secondary market share price also experienced a decline in 2022, and almost halved in the middle of the year.

It is necessary for investors to consider whether it is a problem at the "supply" or "demand".

At the end of August, some media quoted the internal email sent by Ford to employees, saying that Ford planned to lay off about 3,000 employees, mainly affecting employees in the United States, Canada and India.

Supply chain shortage needs redundancy? Doubt.

The replacement of "oil cart o EV", should have caused problems at both ends of "supply" and "demand" to Ford.

After all, this sign of Ford is also the same as last week$FedEx(FDX)$The "preliminary performance" warning is similar (Why FedEx's warning RECESSION again?), are lowering the performance guidance for the next quarter and the following fiscal year. This kind of uncertain practice at the company level is extremely damaging to market confidence.

Yesterday, the entire manufacturing sector, except the aviation manufacturing industry, which has little to do with it, fell, such as$General Motors(GM)$$Rivian Automotive, Inc.(RIVN)$Wait. Ford, as a representative of the traditional manufacturing company, also has performance expectations, which further strengthens investors' expectation that the market will enter a "recession".

Since the Q2 financial report season this year, from the retail industry $Wal-Mart(WMT)$ $Target(TGT)$, logistics $FedEx(FDX)$. Now, Ford, the auto industry, has pushed American policy makers step by step.

Let's see what decision Jay Powell will make tonight.