Welcome to the never-ending chip shortage
A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up “These most recent scheduling adjustments are being driven by temporary parts shortages caused by semiconductor supply constraints from international markets experiencing Covid-19-related restrictions,” said General Motors. “We expect it to be a near-term issue.”Not so fast: While General Motors’ supply troubles may ease in the coming weeks, the industry has to remain vigilant. Intel and other chipmakers are working to expand their production capacity, but it can take years for new plants to come online. Daimler (While Indian stock markets have been trading near all-time highs, Zomato’s listing was a big test of investor appetite for loss-making tech startups. Zomato reported revenue of 19.93 billion rupees ($266 million) for the year to March 31, 2021, and a loss of 8.16 billion rupees ($109 million).The country has a ton of so-called unicorns — tech startups valued at more than $1 billion — but none of them had ever gone public in India or overseas before. Analysts had previously expressed concern that the startups — many of which have raised hundreds of millions of dollars from private investors at extremely high valuations — needed to start showing consistent profits.”The tremendous response to our IPO gives us the confidence that the world is full of investors who appreciate the magnitude of investments we are making, and take a long term view of our business,” Goyal wrote.Vaccines = economic recovery?For the vaccinated, it’s tempting to think of the pandemic as under control.But that’s not the case. In most of the world, the economic recovery still depends on getting more shots into more arms, and that’s not happening quickly enough. Meanwhile, the Delta variant continues to spread, including among the fully vaccinated.See here: IHS Markit has downgraded its global growth forecast for 2021 by 0.2 percentage points to 5.8%.”In 2021 and 2022, economic growth will be linked to COVID-19 vaccination progress. Countries with low vaccination rates face increased risks from the Delta variant of the virus, adding to the urgency of stepping up international vaccination campaigns,” said Sara Johnson, executive director of global economics at IHS Markit.Warning, warning: July PMI data complied by IHS Markit showed Britain’s economic recovery slowed dramatically as the Delta variant caused a sharp spike in cases and forced huge numbers of workers to stay home. That’s despite one of the highest vaccination rates in the world.”Those signalling a drop in output mostly commented on severe shortages of raw materials and the impact of COVID-19 isolation on staff availability,” IHS said in its report.Earnings from American Express (AXP), Honeywell (HON), Kimberly-Clark (KMB), NextEra Energy (NEE) and Schlumberger (SLB) are out before the opening bell.Coming next week: What does the Federal Reserve think about the threat posed by the Delta variant? The central bank gives its next policy update on Wednesday.