My Investing Muse (28Oct24)
Layoffs & Closure news
-
Southern Glazer's Wine & Spirits, the largest wine distributor in the US, has reportedly laid off hundreds of employees across the country. These reports are unconfirmed. - Wine Searcher
-
Intel has submitted in an official document that it plans to reduce staff, laying off 1,300 people spread across four offices in the U.S. state of Oregon. - The Hindu
-
Multiple teams at Meta were hit by layoffs on Wednesday, the company confirmed in a statement to TechCrunch, noting these changes were made to reallocate resources within the company. - TechCrunch
-
LSEG considers cutting 200 jobs globally, Bloomberg News reports
-
Broad Institute of MIT and Harvard Lays Off 87 Workers in Restructuring Effort - The Crimson
-
Deloitte has cut about 250 employees in the UK who were deemed to be underperforming, marking at least the third time in the past 13 months that the Big Four accounting and consulting firm has axed staff. - FT
Layoff & closure news continued into the week.
Market Abnormality
This post by X user Global Market Investor got me thinking. What used to move in contrary has been moving otherwise. What could be happening here?
The market can be bullish and show bearish signs. What if all the signs are correct and it is just a matter of timeframe? What if the fundamentals are weakening against the background of a record market? Is this about bulls having a headstart and the bears catching up?
Market peaks and contractions are just part of the cycle. Every dog, bull and bear will have its day.
Druckenmiller is shorting U.S. Treasuries with a record setting 20% of his portfolio. He knows what's about to happen. Interest rates could double from here. - X user Financelot
Druckenmiller is taking the other side of this bet, that he is shorting U.S. Treasury bonds. Bets against U.S. government bonds now account for 15% to 20% of Druckenmiller's portfolio.
Should we consider some hedging?
My final thoughts
The US election is going to bring some volatility to the market. The outlook of the earnings season could be more vital than the actual earnings performance.
Excluding the "Magnificent 7" companies, the other 493 $SPX companies are reporting earnings growth of 0.1% for Q3 - X user FactSet
Some of the top US companies - the S&P493 report earnings growth of 0.1% for Q3/2024 - exclude the Magnificent 7. What does this say about both the American and the global economy?
S&P 500 represents some of the top American companies in the world. Most of them are global companies, generating revenue globally. With the overweight of the magnificent 7, this can skew the performance of the index. S&P 500 represents more than the American economy.
While foreign revenues made up just 28% of the S&P 500’s revenues in 2023, some sectors are more exposed to foreign sales than others. Source is from Visual Capitalist post in 2023.
The macro data like PCE is likely to rattle the market and the Fed’s next interest rate decision. More volatility is expected together with the war in Middle East, Ukraine and other Black Swan events. I recommend caution and consider some hedging for the coming days.
Comments