To The Moon

My Investing Muse (07Jul25)

Layoffs & Closure news

• June ends with the third Illinois trucking company to file for bankruptcy Elma Transport files for Chapter 11 bankruptcy - Freightwaves

• MICROSOFT TO LAY OFF AS MANY AS 9,000 EMPLOYEES IN LATEST ROUND OF JOB CUTS -THE SEATTLE TIMES

US-based employers announced 47,999 job cuts in June, bringing total Q2 2025 layoffs to 247,256, the highest Q2 total since 2020. Year-to-date, firms have announced 744,308 job cuts, the most for any first half of the year since 2020. Outside of 2020, this was the highest first half since 2009, when 896,675 cuts were announced. The government sector has led the surge with 288,628 layoffs, including federal and contractor reductions. Retail and technology sectors followed, with 79,865 and 76,214 job cuts, respectively. Economic conditions, closures, and restructuring have been the primary drivers. US layoffs remain elevated. - X user The Kobeissi Letter

The above are some news items about layoffs and closures. As tariff negotiations drag on, the collateral to businesses (especially smaller ones) can compound.

Big Beautiful Bill (BBB)

Here are some news and updates about BBB:

Now that the budget bill has passed Congress, we can see what the projections look like for deficits, government debt, and debt service expenses. In brief, the bill is expected to lead to spending of about $7 trillion a year with inflows of about $5 trillion a year, so the debt, which is now about 6x of the money taken in, 100 percent of GDP, and about $230,000 per American family, will rise over ten years to about 7.5x the money taken in, 130 percent of GDP, and $425,000 per family. That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments), which will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases, or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels. This printing and devaluing is not good for those holding bonds as a storehold of wealth, and what’s bad for bonds and US credit markets is bad for everyone because the US Treasury market is the backbone of all capital markets, which are the backbones of our economic and social conditions. Unless this path is soon rectified to bring the budget deficit from roughly 7% of GDP to about 3% by making adjustments to spending, taxes, and interest rates, big, painful disruptions will likely occur. - Ray Dalio

With the Big Beautiful Bill passing, national debt is forecasted to reach $40 TRILLION this year No end in sight - X user Kalshi

U.S. M2 Money Supply hit a new all-time high - BarChart

The USD has now lost almost 11% of its value this year - BarChart

America’s M2 money supply has seen a recent surge. Are we surprised that USD has lost almost 11% of its value in 2025?

Article dated 22May2025. Source https://www.itmtrading.com/blog/7-6-trillion-debt-wall-hits-as-us-scrambles-for-buyers/

With a Federal debt wall of USD$7+ trillion, would USD’s value weaken over time? What should International investors do to manage the risk from such devaluation? Is diversification into different assets, markets a good way to hedge?

My final thoughts

The S&P 500 represents some of the top businesses from America. With global market accounting for a good portion of its revenue and profits, is there a strong correlation between the S&P 500 and the American economy? Is this a weakening correlation?

When the S&P just hit all-time highs but 60% of Americans are using Afterpay to buy groceries - X user BurryTracker

The ones who can afford to trade stocks and shares are not the ones who need BNPL to pay for groceries. Same world. Different reality.

It is possible for some income bracket groups to do well while the other income groups suffer. While the recent S&P 500 peak brings excitement back tothe market, let us research before investing. There are different risk-rewards returns set against backdrops of different time horizons.

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.

@TigerStars

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