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Walk into the closest grocery store and look around... What do you see? If it's anything like the store by my house, your answer is likely "a lot of empty shelves."

These Days, Efficiency Means Scarcity By Marc Gerstein, director of research, Chaikin Analytics Walk into the closest grocery store and look around... What do you see? If it's anything like the store by my house, your answer is likely "a lot of empty shelves." The frozen pizza selection is about half the size it used to be. That would be shocking if I were a frozen pizza connoisseur. Fortunately, I'm not. But it still irks me... Everything isn't gone. Inventories just seem perpetually low. Now, I'm sure you're ready with a seemingly logical explanation. After all, the COVID-19 pandemic and its aftermath really gummed up the supply chain. That's part of it, sure. But something bigger is going on... Put simply, the way businesses run their operations has changed dramatically over the past 30 years. And it's quantifiable with a single statistic. The Federal Reserve Bank of St. Louis is tracking the change. And frankly, it's a bit of a head-scratcher. These days, "efficiency" for businesses doesn't necessarily translate to "abundance" for consumers. In fact, efficiency can, does, and will continue to produce scarcity in our stores. And unless something dramatic changes, this is our new normal...   Recommended Links: 'My wife now knows [I have] $54 million' A handwritten letter given to an analyst left us speechless. And tomorrow, we're going to share all the details of this incredible true story with you. The best part is, the SAME incredible opportunity that helped this anonymous subscriber is here again today. And it doesn't require you to place huge bets (or take on a lot of risk) to see massive upside potential. Click here to get this expert's trading secret revealed. Target's New Warning Signals a Terrifying Trend One of the biggest and most important stores in America just sent out a terrifying signal for you and your money. The big-box retailer is preparing for a shocking economic reality – canceling product orders and slashing prices to sell off what it's got. It's a major warning signal for most investments. Even worse – your cash savings could be at risk. Click here for the full story. The St. Louis Fed hosts our friend "FRED." It stands for "Federal Reserve Economic Data." As the full name implies, it's an online data source. And it's free to the general public. FRED tracks all kinds of things. Today, we're looking at one specific piece of data... It's called the "Total Business: Inventories to Sales Ratio." This metric simply compares business inventories to business sales. The higher the number, the more inventory businesses are carrying compared to their sales. And as you can see in the following chart, the data can get pretty volatile. Take a look... First, notice the big spikes around the housing bust in 2008 and 2009 and the pandemic in 2020. Those examples show what happens when sales drop rapidly and dramatically. Next, I want you to focus on the long-term trend... The inventories in the 1990s were dramatically higher than they are today. It was an era of abundance. But it was also an era of rapid modernization and efficiency... Businesses used computers to model and project inventories. And suddenly, the world went from, "Let's have enough goods in stock for a surprise rush," to, "Our model says this specific amount of inventory will cover 95% of expected demand." These types of inventory models rule the world nowadays. But that point comes with a big caveat... Any unexpected surge in demand messes up the system. That's exactly what happened after the COVID-19 pandemic... Carmakers are the perfect example. They run their business using a "just in time" model. The idea is that they'll carry next to zero inventory. Every part they order will arrive "just in time" for it to enter the manufacturing process. That's why they ran into big trouble when the pandemic hit... Carmakers predicted that sales would decline due to all the COVID-19 restrictions. And they did briefly... but not anywhere near as much as the carmakers expected. In turn, their highly efficient process based on low inventories turned into a scarcity model. Now, outrageous scarcity-driven stories have flooded the industry. One Ford dealer in Florida, for example, allegedly tacked a $69,000 markup on to a new F-150 Lightning all-electric pickup truck. It seems crazy. But this is about more than just the pandemic... It's the result of low inventories. It dates back to the era of rapid modernization and efficiency in the 1990s. And now, as long as businesses use this "highly efficient" model... we'll see empty shelves in stores and empty parking lots at car dealerships. It's our new normal any time an unexpected surge in demand happens. Good investing, Marc Gerstein Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral     Bearish Dow 30 +2.20% 2 23 5 S&P 500 +2.49% 21 360 115 Nasdaq +2.52% 7 63 29 Small Caps +1.80% 158 1210 529 Bonds -1.70% Energy +5.18% 3 18 0 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are Bearish. Major indexes are all bearish. *  *  *  * Top Movers Gainers TSLA +9.35% FANG +8.17% PXD +7.12% UNH +6.25% XOM +6.22% Losers DVA -15.01% BBWI -9.45% EMBC -4.46% META -4.09% DISH -3.45% *  *  *  * Earnings Report Reporting Today Rating Before Open After Close RJF No earnings reporting today. Earnings Surprises LEN Lennar Corporation Q2 $4.69 Beat by $0.73 PGR The Progressive Corporation Q1 $1.15 Missed by $-0.09 *  *  *  * Sector Tracker Sector movement over the last 5 days Health Care +1.72% Real Estate +1.49% Discretionary +1.44% Information Technology +1.10% Staples +0.86% Communication +0.39% Financial +0.35% Utilities -1.15% Industrials -1.31% Materials -3.02% Energy -9.26% *  *  *  * Industry Focus Dow Jones REIT Services 3 75 37 Over the past 6 months, the Dow Jones REIT subsector (RWR) has underperformed the S&P 500 by -1.39%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #14 of 21 subsectors and has moved down 4 slots over the past week. Indicative Stocks SRG Seritage Growth Prop MAC The Macerich Company SLG SL Green Realty Corp *  *  *  * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here. 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