My Investing Muse (16Jun25)
Layoffs & Closure news
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VA signs a $726K agreement with OPM to help lay off 80,000+ employees. - House Veterans’ Affairs Democrats
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This is the prequel to market consumption and production demand. Supply chain is the blood of the economy. Without which, goods & services do not reach consumers and users. Layoffs in the supply chain precede layoffs in other sectors.
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US job postings continue to fall: Job postings on Indeed dropped to the lowest in 4 YEARS at the end of May. Moreover, new job postings hit near the lowest level since December 2020. Both metrics have declined for 3 consecutive years. US job gains were likely OVERSTATED by ~900,000 in 2024: US private payrolls rose 0.6% Y/Y in 2024, according to the BLS's QCEW data covering 97% of employers. This is HALF of 1.2% reported by the non-farm payrolls. - X user Global Markets Investor
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Citigroup confirms 3,500 tech job layoff in global IT restructuring - People Matters (IN)
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A MASSIVE 696,000 Americans lost jobs in May, the 2nd highest DECLINE since the 2020 CRISIS, according to the household survey. Remember, household survey counts employed individuals, meaning 1 person with 2 jobs = 1 job.
Layoffs and Hiring at Big Tech
The above are some news items about layoffs and closures. As tariffs negotiation drags on, the collateral to businesses (especially smaller ones) can compound.
OIL PRICE NEWS
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Drilling activity continues to hover at three-year lows as lower prices and market uncertainty prompt operators to cut back on their plans. - MRT
The Iranian Parliament says Iran is seriously looking at a possible closure of the Strait of Hormuz due to Israel's attacks. If this happens, this would be absolutely devastating for the United States and most of the world, as 24% of the world's oil passes through it. Disrupting oil shipping would likely trigger an immediate surge in oil prices, potentially over $100–150/barrel. This would increase U.S. gas prices, drive inflation, and hurt American consumers and businesses. - X user Ed Krassenstein
With the possible closure of the Straits of Hormuz, this will affect the supplies and supply chain of oil from the Middle East. This can be reflected in the surge of oil prices, supply chain costs and inflationary pressures.
Reshoring News
Reshoring has created about 2 million U.S. jobs over the past decade and a half, manufacturing accounts for 8% of the U.S. workforce. “Nearshoring,” where production is moved to closer or more friendly countries, is seen as a more likely result of tariffs, with Mexico, Vietnam, and India expected to be big beneficiaries. - Investopedia
To reshore, it requires remapping of the supply chain, procurement, maintenance program, suppliers, local partners, energy, skilled labour and more. It can be done, just need to secure these.
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The USD has now lost almost 10% of its value this year - BarChart
With this loss of USD’s value, how will this affect re-shoring, apart from US exports becoming more affordable?
Debts and Delinquency
The delinquency rate on US commercial mortgage-backed securities (CMBS) for offices SURGED to 10.3% in April, near the highest EVER. The multifamily delinquencies spiked 113bps in April, to 6.57%, the highest since 2015 - X user Global Markets Investor
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US consumer serious delinquencies (90+ days) are RISING: Credit card delinquencies hit 12.5%, the highest in 14 YEARS. Student loan delinquencies reached 8%, the highest in 5 years after relief expired. Auto loans delinquencies hit 5%, the second-highest in 15 YEARS. - X user Global Markets Investor
The delinquency in America can compound over time, affecting spending, production and employment.
My final thoughts
This is an interesting post from Ms Amanda:
The economy is breaking. And no one’s ready. - 100% of the 12 Fed districts reported lower labor demand, noting hiring pauses, reduced hours, and layoffs. - Severance? 8–12 weeks if you’re lucky... and that’s pre-tax. - Credit delinquencies at 12.31% - highest in over a decade. - Nearly 42% of homeowners applying to refinance got denied... - 600,000+ layoffs in 2025 so far. - Forecasted unemployment: 4.8% by year-end (Tombs) You’re looking at: - A 6-month job search - 2 months of cash - Soaring debt - Shrinking access to credit - Daily job data getting revised down every month - Don't forget wage garnishments from student loans about to hit. Wait ‘til the headlines catch up. - X user Amanda Goodall
People gravitate towards bad news. The series of bad news can weigh on the hearts of investors and consumers. There would be a point when sentiments overtake data. When bearish sentiments take over, positive data may not push back against the sentiments.
With the Middle East and Ukraine situation heating up, there are potential black swans that can impact the market. For non-US citizens, let us monitor our USD-denominated assets as the currency has devalued significantly in recent days.
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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