To The Moon

My investing muse

Layoff news continued last week:

• The latest round of layoffs comes as Google has been cutting jobs consistently over the past year, with reports suggesting that the total number of employees affected this time stands at 15,000, following last year's 12,000 job cuts. - India Today

• eBay is laying off 1,000 employees, about 9% of its staff - CNN

• Macy's is planning to lay off about 13% of its corporate staff and close five stores to trim costs and redirect spending to improve the customer experience - USA TODAY

• Microsoft lays off 1,900 workers, nearly 9% of gaming division, after Activision Blizzard acquisition - CNBC

• Salesforce is laying off about 700 employees across the company in the latest round of sackings to hit the tech industry. - Business Today

• Levi Strauss will lay off 10% to 15% of its global corporate workforce. - CNBC

• With reports of layoffs affecting 20% or more of the LA Times newsroom. - Yahoo News

• Shares of German software company SAP jumped Wednesday after it released its quarterly and full-year results and announced plans to restructure 8,000 jobs in its push toward artificial intelligence. - CNBC

• As tech firms prioritize investments into artificial intelligence and go on a hiring spree, other segments are likely to see layoffs continue into 2024.

  More than 20,000 tech employees have already lost jobs so far in 2024. - CNBC

Layoffs continued into 2024. Is this the end or is this the start? Is this the trimming of excess, an anticipation of falling demand or both?

Leading Economic Indicator (LEI)

One of the important data that I look to for macro is LEI from The Conference Board.

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(Updated on 22 Jan 2024) The Conference Board Leading Economic Index® (LEI) for the U.S. fell by 0.1 percent in December 2023 to 103.1 (2016=100), following a 0.5 percent decline in November. Can we achieve a soft landing?

As per the chart above, there is a signal for possible recession.

The components of the LEI are categorized into both Financial and Non-Financial Components. These 10 components give a good reflection of the economy. There are signs of a potential recovery. Will we get a soft landing that many have hoped for?

Conclusion

I have mentioned that technicals indicated potential all-time highs (ATH) for some indices and stocks. Inflation is not running rampant but remained stubborn, still away from the 2% target set by the Fed.

A chart showing the 2023 gain of the Magnificent Seven stocks.

The Magnificent 7 were the driving forces behind the S&P500 gain in 2023. Likewise, their (non-) performance can also pull down the index.

This will be a big week for the Magnificent 7 and the Index. Thus, let us monitor and consider some hedging.

@TigerStars

$S&P 500(.SPX)$