My Investing Muse (18May2026)
Layoffs, closures and Delinquencies
META is preparing to cut about 10% of staff on May 20, nearly 8,000 people, per YF. - X user Unusual Whales
4,000 Cisco employees lost their jobs this morning. Last night the company raised AI order guidance. From $5B to $9B. Stock jumped 17% after hours. 12 hours between the earnings and the layoff. The money is moving. The people are not. - X user George Pu
Tech layoffs in 2026 so far: Jan - 27,223 Feb - 24,631 Mar - 49,452 Apr - 18,385 May - 9,249 128,940 people in five months. March 2026 was the worst month for tech layoffs in over a year.
My thoughts
Recent talks between the United States and China appeared to improve short-term stability, but they did not produce a clear resolution to the key issues between both sides. Expectations differ materially, and the larger strategic questions remain unresolved. Even so, the developments may reinforce the view that China is continuing to strengthen its position as a major global power. At the same time, markets have extended their rally, and the S&P 500 is increasingly being discussed in the context of a move toward 8,000. The key question is whether underlying fundamentals can eventually justify the pace of that optimism.
Geopolitical developments remain another source of uncertainty. The direction of conflict may not rest fully with the United States, while Israel is likely to play an important role in shaping the next phase. Although there are still opportunities for de-escalation, several key players are not yet fully represented at the negotiating table.
In the coming week, NVIDIA’s earnings will also be a major focal point for markets. The release could introduce volatility, but it also carries symbolic importance because NVIDIA remains central to market expectations around growth, technology leadership, and the broader equity narrative. With expectations for the S&P 500 still elevated, earnings and fundamentals will need to do more of the heavy lifting.
Valuations and Reality
The stock market is not the economy, and that distinction matters more as valuations rise. A central question for investors is whether markets can continue climbing until economic conditions improve, or whether asset prices will need to adjust first to better reflect the underlying economy.
AI Sentiment and Market Risks
Other market concerns are also beginning to shape sentiment around artificial intelligence. Legal and corporate governance issues surrounding OpenAI have raised broader questions about trust, leadership credibility, and how public expectations for AI evolve. At the same time, more reports are emerging about the operational difficulties tied to AI implementation. These stories are appearing alongside retrenchment and layoffs, with AI often cited as one contributing factor. There are also signs that some companies have struggled after pivoting aggressively toward AI, which could cause investors to reassess how quickly these investments will translate into results.
If AI implementation success remains limited, investor enthusiasm may become more selective. Some investors may still be comfortable with the risks, but others could begin rotating into different sectors, especially as U.S. bond yields remain elevated and offer an alternative to equities. With multiple moving parts still in play in the week ahead, markets remain vulnerable to both disappointment and external shocks, including any further escalation in the Middle East.
Financial Strategy and Outlook
Let us spend within our means, invest only what we can afford to lose, and avoid leverage. Let us review our current holdings and divest from businesses losing their competitive advantages. Additionally, I will consider adding both hedging strategies and defensive positions to our portfolio to mitigate risk.
As we move forward, it is crucial to conduct thorough due diligence before assuming any new responsibilities.
Wishing everyone a successful week ahead.
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