To The Moon

My investing muse - layoffs, top companies, recession and population crisis

Layoff news continued last week.

• Swiss wealth manager Julius Baer reported a net credit loss of $701 million related to troubled property group Signa Holdings.

  CEO Philipp Rickenbacher said he would step down. The bank also said it would cut 250 jobs this year. - CNBC

• One day after digital news start-up The Messenger was shuttered and 270 employees were laid off, now-former staffers filed a class-action lawsuit against their former employer on the grounds that they were not given proper notice. - Yahoo News

• Identity management company Okta (OKTA) is laying off seven percent of its workforce as part of a broader restructuring effort. The job cuts are expected to combat costs of up to $24 million in restructuring charges in the fourth quarter. - Yahoo Finance

• Deutsche Bank on Feb 1 said it would cut 3,500 jobs, buy back shares and pay dividends, after posting a 30 per cent drop in fourth-quarter profit. - Straits Times

• Zoom is cutting about 150 jobs, or close to 2% of its workforce - CNBC

• PayPal cuts 2,500 jobs, UPS to let go of 12,000 employees - LiveMint

• The layoffs were executed this morning and affected staff in the Cash App, foundational and Square arms of Block. Reportedly, around 1,000 people — or 10% of Block’s headcount — were impacted. - TechCrunch

• Among the companies cutting jobs this year are Flexport, warehousing provider Flexe and digital broker Uber Freight, the report said, as weaker freight volumes and high-interest rates leave firms feeling stretched. - PYMNTS

• Proofpoint is laying off about 6% of its global workforce, or 280 employees, the company confirmed to TechCrunch.

• The company also announced 12,000 layoffs as part of an effort to align resources in 2024. UPS’s 2024 outlook expects revenue to range from $92 billion to $94.5 billion. - CNN

• AMERICAN Airlines Group will lay off 656 employees who help passengers with lost luggage and other travel problems as their jobs are consolidated into other teams. - Business Times

Top Companies (charts from Visual Capitalist)

In this graphic, we compare the 15 largest Chinese and American companies based on their 2022 revenue, using data from the Fortune China 500 and Fortune Global 500. - Visual Capitalist

It is interesting to note that some of the companies with the biggest revenue are not necessarily the ones with the biggest market capitalization.

Most valuable brands in 2024 and Nvidia has gained much branding following the AI trend.

Population Crisis

Japan has the challenge of an ageing population. what can be done to improve this?

Most developed countries are facing issues of insufficient births. Without a strong immigration policy, population shrinkage is hard to avoid. A falling population could present challenges more immediate than that of a climate crisis.

Europe is bordering on recession

• *GERMANY 4Q GDP FALLS -0.3% Q/Q; EST. -0.3%; PREV. -0.1%

  *GERMANY ENTERS RECESSION

• *EURO ZONE Q4 GDP 0.0% Y/Y; EST. -0.1%; PREV. -0.1%

  *EURO ZONE AVOIDS RECESSION

Germany has entered a technical recession. For the Eurozone, they narrowly avoided recession even though they had 0% GDP growth. Eurozone will probably have to prioritize their internal matters over external issues with this financial crisis. Germany, one of the leading European powerhouses would have a reduced role as they deal with their economic challenges. How will this affect global trade?

Conclusion

This week has a mix of good and bad news. S&P500 & Dow Jones have hit recent record highs. The latest jobs figure showed 353K jobs created despite all the retrenchment news. All of the Magnificent 7 have finished their earnings except for Nvidia. Meta was the surprise of the lot but it is most welcoming as the stock surged to a recent high. Nvidia looks to enjoy good earnings due to its importance in the AI world.

With most of S&P500’s growth powered by the Magnificent 7, it is interesting to see how the 493 will perform. S&P500 represents some of the top businesses and significant revenue from outside of the USA. Thus, seeing the S&P500 as a US economy can be a weakening correlation.

Let us spend within our means, invest with what we afford to lose and avoid leverage. It is important to update our watchlist regularly so that we can buy great companies at good discounts when prices fall.

@TigerStars

$S&P 500(.SPX)$