My Investing Muse (09Dec24)
Layoffs & Closure news
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Intel's biggest revenue decline in five quarters to hit amid broad layoffs and missed AI boom - Calcalitech.com
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UK-based wealth manager St James’s Place is planning to cut about 500 jobs in an attempt to reduce costs under chief executive Mark FitzPatrick. - FT
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Cargill plans to cut around 5% of global employees, internal memo says - Yahoo Finance
Layoffs could be companies trimming their fats or their efforts to stay afloat. This may not always be bad news.
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US restaurant bankruptcies are accelerating: There have now been 14 bankruptcies in restaurant chains with $20+ million in revenue this year, the highest number since 2020. This is up 133% compared to 2022 when 6 large chains with at least $20 million in annual revenue went bankrupt. This comes as restaurants have been materially hit by elevated interest rates, rising labor costs, and declining sales. Revenues are declining as US consumers are eating out less often due to inflation. Restaurant prices have increased by ~44% over the last decade, according to Black Box Intelligence. Eating out in the US is a luxury. - X user the Kobeissi Letter
The cutting of luxuries hints at the purchasing prowess of the consumers. Fine dining and entertainment are amongst the first to go during the affordability crisis. Let's monitor.
This next section is taken from Grok 2+ FLux (beta).
Last week saw several notable layoffs across various sectors in the United States:
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Vox Media: The company announced layoffs and reorganization of its lifestyle properties, including Eater, PS (formerly PopSugar), and Thrillist, right before the holiday season. This move has drawn significant criticism for its timing and execution.
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Tech and Manufacturing: Layoffs were reported in the tech sector with companies like Microchip Technology and in manufacturing with companies like Ford and Bosch. The exact numbers of these layoffs weren't specified in the sources provided, but the trend indicates significant job reductions.
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Other Sectors:
Fiserv, Inc. announced over 1,500 staff cuts across the U.S.
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Toro Corp. in Minnesota cut more than 300 office staff positions.
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NovaBus increased its staff reduction, though specific numbers weren't detailed.
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Wells Fargo, FedEx, ITC Federal, Dwarf House Group, LLC, Russ David Wholesale, Inc, Brown Brothers Resources Holdings, and Kashaco, Inc. also announced layoffs, with numbers ranging from 721 at Wells Fargo to smaller figures at the others.
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General Layoff Trends: There's a continued increase in layoffs with November seeing 57,727 job cuts announced, marking a 27% year-over-year rise. The automotive sector led with 11,506 layoffs, indicating a high level of job cuts in this industry.
This reflects a broader trend of companies adjusting to economic conditions by reducing the workforce or restructuring operations. However, these numbers might not capture the full scope of layoffs across all sectors or companies, as some layoff announcements could be smaller or not publicized in the same manner.
Is America having an affordability crisis?
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74% of US residents earning less than $50,000 annually are struggling to afford their mortgage or rent payments. To cover monthly housing costs, 43% of these people had to eat out at restaurants less often, according to a Redfin survey. 36% took no or fewer vacations while 25% borrowed money from family or friends. Even worse, 24% admitted that they skipped meals to afford housing payments. Meanwhile, the share of apartments renting for under $1,000/month fell to 32%, the lowest on record. Housing affordability has never been worse.
Is there light at the end of the tunnel? There should be a quality of life baseline that provides dignity and respect for all.
My final thoughts
This will be another interesting week with the CPI & PPI data. I am unsure if this has any significance over the coming interest rate decision. We can expect some market volatility as the market inches towards new heights.
As we enter the last weeks of Q4/2024, we should receive some businesses’ 2025 outlook. At the same time, it can be timely for us to review our portfolios to cut losses and take some profits off the table.
I like my portfolio to do well in good and not-so-good times. With the current debt situation, I have been hedging. Let us research before investing, spend within our means and avoid leverage.
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