To The Moon

My Investing Muse (13May24)

Layoffs & Closure news

• Peloton is laying off 400 workers, 15% of its global staff. The cuts are designed to save the company more than $200 million in annual expenses. Peloton also said CEO Barry McCarthy is leaving his post. - Nerd Wallet

• We are bringing together our business, finance and economics coverage. Some are geographic: We are shifting our center of gravity in the region from Hong Kong to Singapore, as many of the companies we cover have done. - WSJ

• Bay Area tech layoffs: Google and Rivian cut more jobs - SF Chronicle

News of layoff continued in the past week. Google's CEO has advised that there would be more in the coming week. How would this affect the economy?

Jobs and unemployment data do not tell the full story. Where can we find the data of net income change (employment income gain from new jobs less income from Jobs loss)? These can be better data with economic gain or loss.

Debts

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Short-term, 12.3% (or $245.3 billion) of the rated debt maturing globally over the next 12 months is speculative-grade. - SP Global

• 77% of small business owners are concerned about their ability to access capital and 28% of loan applicants said they had taken out a loan or line of credit with payment terms they felt were predatory - Reuters

• Most banks want to reduce their exposure to the $5.8tn CRE market. A record amount of loans are maturing and need refinancing this year and next. Yet they need interest from the high-yield loans to finance the deposit rates. - FT

• A report posted on the Social Science Research Network found that 186 banks in the United States are at risk of failure or collapse due to rising interest rates and a high proportion of uninsured deposits. - Nora Robert

• From F. Kennedy Jr X post:

  Storm clouds gathering for the American economy:

  1. 43% of small businesses couldn’t pay their rent in full and on time in April.

  2. 2600 retail stores closed in 2024

  3. Nearly 100 million Americans in “ALICE:” category (Asset limited, income constrained, employed).

  4. Another 38 million in poverty. Estate

Debt is not good for the market. Debt should be a concern for businesses, the government and the consumer. Are we going to see the interest rate higher for longer?

Let us check on our portfolio and monitor the companies with high debts.

My final thoughts

CPI should be causing some volatility in the market as the market expect interest rate cuts in the coming months. What the market wants may not be what the market needs. I hope that the Federal Reserve can remain neutrality and do what is best for the economy.

Investing is a personal journey. The biggest reward from investing is the time we save, the learning we gain, and the friendships we make. Investing is a mirror that reveals our mental and emotional strength. Enjoy the journey. To each its own, so long we make money.

The S&P500 has hit a recent high and technical analysis expects this uptrend to continue. The market is susceptible to news and geopolitical events. Let us continue to invest without leverage, research before investing and establish a good margin of safety.

@TigerStars

$S&P 500(.SPX)$