My Investing Muse (21Apr25)
Layoffs & Closure news
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The popular Canadian retailer Frank and Oak is closing up stores amid the tariff chaos. Frank and Oak announced it will shut down its U.S.-based stores by the end of April 2025. - The Street
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After San Francisco biotech company Third Harmonic Bio slashed its staff by half in February, it’s now taking a more drastic step. The inflammatory disease research company’s directors have decided to shut it down, liquidate its assets and distribute its remaining cash to stockholders. - SF Gate
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At Home Group may soon file for bankruptcy as it grapples with financial difficulties and debt issues. The Coppell, Tex.-based furniture and home decor store has a large amount of debt and relies heavily on imported goods from abroad. - The Street
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This poorly implemented tariff policy will result in far more layoffs than new jobs. - X user Jason
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Let’s look at Indonesia. In 2024, there was a 20.2% surge in mass layoffs across sectors, with 78,000 jobs wiped out. In January 2025 alone, 3,325 workers were left without paychecks. - Tech in Asia
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US large bankruptcies jumped 49 year-over-year in Q1 2025, to 188, the highest quarterly count since 2010. Even during the onset of the 2020 pandemic, the number of filings was lower at ~150. This comes after 694 large companies went bankrupt last year, the most in 14 years. The industrial sector recorded the highest number of bankruptcies in Q1 2025, at 32. This was followed by consumer discretionary and healthcare, at 24 and 13. Bankruptcies are rising. - X user The Kobeissi Letter
The above are some of the layoff and closure news. Let us monitor this, as this can lead to market-wide concerns.
Tariffs Updates
Here is some news and my thoughts about the Tariffs. There is no right or wrong, as this tariff situation is yet to be concluded. We can expect more twists and turns along the way:
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Japan, which committed economic suicide with the US-imposed Plaza Accord in the 1980s, is now refusing to perform a déjà vu act. Japanese negotiator leaves the US without any tangible deal. Trump does NOT have all the cards. - X user Kanthan2030
BEIJING, April 17 (Reuters) - China will pay no attention if the United States continues to play the "tariff numbers game", China's foreign ministry said on Thursday, after the White House outlined how China faces tariffs of up to 245% due to its retaliatory actions.
Can the smaller business survive with such tariffs? Can the business return? Will producers & customers seek alternatives? Will there be nationalistic boycotts against US products and services? Let us work things out. The world is better when the biggest players work together.
There can be a world without losers and winners. Knowing "what we have" and "what we can do" allows us to balance threats and weaknesses with opportunities and strengths. We can agree to disagree, give tolerance for cultural differences and work towards a win-win for all.
Both China and the USA can afford a better relationship with each other that promotes trade, collaboration and innovation. This posture shows a lack of understanding of Chinese culture and values. Let us meet somewhere in the middle. The collateral damage is bad for all.
TRUMP: "Tariffs are making us rich. We were losing trillions of dollars on trade under Biden. But now we are making a lot of money."
CBP says latest tariffs have generated $500 million, well below Trump’s estimate — CNBC
The trade war has started. I have considered the trade deficits as advantages to China. It is too early to declare victory. Some businesses will end up being collateral damage, and some may never recover. Let time be the best judge. Working together can be the best option.
My final thoughts
The tariff situation continues to bring volatility to the global markets. The tariff talks between Japan and the USA have ended without a deal. There will be ongoing talks with other countries, and hopefully, some understanding can be worked out.
Some key earnings are coming in the following weeks, including the Magnificent 7. These companies are key drivers of the S&P 500. They are key to rallying the market if their earnings and outlook are well-received by the investors.
Let us review our expenditures, income, and savings. Let us spend within our means, invest with what we can afford to lose, and avoid leverage. I am reviewing my holdings and plan to cut losses with businesses losing their competitive advantages. I would also consider hedging and adding some defensive positions.
Let us do our due diligence before we take up any positions. Let us have a successful week ahead.
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