To The Moon

My Investing Muse (28Apr25)

Layoffs, Delinquency & Closure news

• High-end apparel chain Ted Baker Canada, which operated 31 Ted Baker stores in the U.S. and 25 in Canada, along with eight Brooks Brothers Canada shops, and seven Lucky Brand Canada stores, a year later in April 2024 filed to restructure under Canada's Companies' Creditors Arrangement Act and for Chapter 15 bankruptcy to liquidate and close all of the North American stores. Luxury fashion retailer McMullen on Aug. 21, 2024, filed for Chapter 11 protection in the Northern District of California, reportedly facing a lawsuit filed by online competitor Moda Operandi over alleged copyright infringement. - The Street

• And sometimes, unfortunately, times just get too tough for some businesses to survive. Such is the case in Oxford Junction, Iowa. Its very last remaining grocery store, Coon's Corner, is finally closing its doors. The store had been open for over 150 years. - TT News

• The Federal Deposit Insurance Corporation to cut 20% of its staff, per Reuters.

• The manufacturing layoffs are starting to happen from the tariffs. Volvo is laying off several hundred workers in Pennsylvania, and Mack Trucks is laying off at its Maryland plant. X user - Heather Long

• May 5th, federal student loan collections resume. Let's break it down. Over 5 million borrowers are already in default - 5M ya'll!!! 4 million more are in late-stage delinquency. Nearly 10 million could be in default within months. That’s 25% of the federal loan portfolio at risk. Only 38% of borrowers are current. Everyone else is delinquent, paused, or stuck in limbo... and they were more than clear in that PR that the Department is done waiting. X user Amanda Goodall

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Housing defaults have skyrocketed. This is unlike anything we’ve seen in a decade - X user Bravos Research

US bankruptcies are SKYROCKETING: US weekly bankruptcy filings 4-week average jumped to 7, the most since the 2020 Crisis. Outside of 2020, this is the highest level since the Financial Crisis. Companies with more than $50 million in liabilities

US bankruptcies are rising as if there is a CRISIS: 188 US large companies declared bankruptcy in Q1 2025, the most in 15 YEARS. This is up 35% from 139 recorded in Q1 2024. In 2024, big bankruptcies hit 694, the most in 14 YEARS. - X user Global Markets Investor

The above are some of the layoff and closure news. Let us monitor this, as this can lead to market-wide concerns.

The Trade and Tariffs War

Here is some news about the trade and tariffs war:

• China asks South Korea not to export products using rare earths to US defence firms - Reuters

• India to impose 12% tariff on steel to limit cheap imports from China.

• Jeffrey Sachs warns India not to fall into the US trap of “containing China.” Indian host: “But maybe we want to contain China!”

• US Treasury Secretary Bessent says the tariff war with China is unsustainable, and he expects de-escalation.

• President Donald Trump’s tariffs on Chinese imports threaten to disrupt Southern California’s trade and logistics economy, a sector that moves a third of the nation’s container cargo and supports nearly 2 million jobs, according to a new analysis. 8 million people unemployed, shelves thinning, hospitals out of needles and supplies. Air plane and missile production lines start to face crunches in 3 months. And headaches ( 80% of the whole spectrum of pain killers have active ingredients from China).

• President Donald Trump’s tariffs on Chinese imports threaten to disrupt Southern California’s trade and logistics economy, a sector that moves a third of the nation’s container cargo and supports nearly 2 million jobs, according to a new analysis.

• $1.1 trillion of trade creates value for both countries. It is a willing buyer meeting a willing seller. With Tariffs, the balance is affected. There is still room for both countries to prosper together.

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The CEOs of three of the nation's biggest retailers — Walmart, Target, and Home Depot — privately warned Trump that his tariff and trade policy could disrupt supply chains, raise prices, and empty shelves - Axios. Trump was warned of empty shelves and financial turmoil from tariffs and firing Powell. His U-turn pushed stocks higher - CNN. The empty shelves can be problematic for the citizens. This can spike inflation and bring chaos. These can be avoided if we can all work together.

• Boeing CEO confirms Chinese airlines have returned new planes - X user Insider Paper

• US: We are negotiating with China and will even reach an agreement. Tariffs will be reduced soon. China: All this is fake news. The two sides have not consulted or negotiated on tariffs, let alone reached an agreement. US: We are waiting for a call from China. They will call. They are eager to reach an agreement. China: All this is fake news. This tariff war was initiated by the US. China's attitude is clear. If you want to fight, we will fight to the end. If you want to talk, the door is open. Dialogue and negotiation must be equal, respectful and reciprocal, so we will not take the initiative to call. - X user Loong of the East

U.S.-China trade tensions, driven by tariffs, are causing global ripple effects, including supply chain disruptions, economic risks, and strategic posturing. The US should experience goods and service shortage in the coming weeks. This can spike prices and some businesses can go under. Let us monitor this closely.

My final thoughts

What can be more difficult than buying the dip? Buying the dip with leverage.

There are many who have celebrated the week as market turn green. Companies from China, America and other countries can experience disruptions, delays and some of them, closures.

Without stability with tariff outcomes, companies can choose to wait it out. It is possible if American businesses has China as a minor supplier. For those who rely mostly or entirely on China, their existence is under threat. American corporations have managed to meet the Trump administration to de-escalate the tariffs tension. This privilege is not available to most businesses. This should suggest inadequate preparations before execution.

In some cases, tariffs might as well become embargo. Through my Asian lens, it is more a conflict of culture where tariff is the “weapon” of choice. I do not wish bad upon any countries. However, America runs a risk of isolation and pushing more countries towards China.

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

$S&P 500(.SPX)$