My investing muse for week of 06Jan25
My Investing Muse (06Jan2025)
Layoffs & Closure news
"The Tech industry witnessed a 42% decline in layoffs compared to 2023, which saw the highest number of job cuts in the last four years. Over 260,000 employees were handed pink slips by over 1,200 companies this year. The spate of layoffs in 2023 was driven by factors such as economic downturn, considering rising inflation and interest rates. The eventual decrease in consumer spending hit the tech industry which relies heavily on their demand for its products and services. Some other key reasons that prompted companies to cut jobs were the stock market downturn, shifting market dynamics, and largely the over-hiring spree during the pandemic." Will the layoff trend continue into 2025? Is recovery in sight? - Source: India Express
US hydrogen fuel cell and truck firm Hyzon could carry out mass layoffs in February if it cannot raise funds or find a buyer, with the firm’s senior team selling off shares. On December 20, the company issued a Worker Adjustment and Retraining Notification (WARN) Act notice to employees at its Bolingbrook, Illinois and Troy, Michigan facilities. - H2 View
According to Wolf Street, which reported that the “Information” industry saw a 20% decrease in its workforce over more than two years since its peak. According to SFGate, there were 10,200 permanent layoffs filed in the city during 2023. Can we expect a recovery in housing prices in 2025? - NY Post
Are we expecting fewer layoffs in 2025?
Interest Rates in the opposite direction
It has now been 56 days since Fed Chair Powell said that the rising 10-year note yield is unlikely a "material change in financial conditions that [will] last." Mortgage rates are now up 100 basis points since the "Fed pivot" began in September. The market is fighting the Fed. - X user The Kobeissi Letter
Would it be concerning if the market has more sense than the Fed? It is not about what they see but it is about what they choose to tell us. Let's monitor.
Market players will need to manage their risk exposures. Some of these can be seen when higher interest rates are offered for parties with higher risk profile. What does this say of the market sentiment? Is there more risk in the market?
My final thoughts
Sometimes it's better to trust an enemy than a friend. Sometimes, our “enemies” can provide better assessments and honesty about the situations we are in. I hope to maintain a posture of “I can be wrong” as part of my learning journey.
Let us remain objective and try to listen to all. Profits is one of the outcomes but the learning we glean can be more significant. Let us finetune our investing model as we seek improved returns. The most important return is time, and not just money.
Here is wishing everyone a great start to 2025.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
