To The Moon

My Investing Muse

Layoffs, closures and Delinquencies

• 26% OF THE 7.5 MILLION UNEMPLOYED AMERICANS ACTIVELY SEEKING WORK HAVE BEEN JOB HUNTING FOR MORE THAN SIX MONTHS, ACCORDING TO THE FINANCIAL TIMES. - First Squawk

• BIG BANKRUPTCIES HAVE CLIMBED TO THEIR HIGHEST LEVEL SINCE COVID, ACCORDING TO BLOOMBERG.

• California’s wine industry is facing a cascade of economic and market pressures, leading even long-standing labels and industry giants like Gallo to shut down production - MacroEdge

• "Americans are defaulting at a crisis-level pace," per Yahoo Finance.

• Block to cut about 4,400 employees - MacroEdge

• Papa John's plans to close 300 of its restaurants by the end of 2027 as it moves to cut costs. -CBS

• CNBC is cutting some newsroom jobs in a reorganisation meant to unify its digital and TV news operations - MacroEdge

• AMC Theatres plans to close more locations as it continues to grapple with sluggish post-pandemic box office numbers, company executives warned this week - MacroEdge

• Ebay to cut 800 jobs - Kalshi

• GEN Z IS FACING A JOB-MARKET BLOODBATH, ACCORDING TO FORTUNE

• Credit-card and auto loan delinquencies have hit 12.7% and 5.2%, per Bloomberg.

• TrueCar lays off 30% of staff amid reorganisation - MacroEdge

• Judge gives UPS green light for $150,000 buyouts to drivers, estimates that 10,000 drivers could resign - MacroEdge

• 42% OF RECENT COLLEGE GRADUATES ARE UNDEREMPLOYED — THE HIGHEST LEVEL SINCE 2020, PER FORBES

• Panasonic said to layoff 12,000 employees - MacroEdge

• 722 banks reported unrealised losses exceeding 50% of their capital - US FED

My Final Thoughts

India's unemployment tsunami will hit in a matter of years when AI can replace of the entry level white collar work. When the jobs are "relocated" from the West to India, it is not a permanent but a temporary case. Workers will need to create value, fighting innovations and AI to create value in the market. There will be a major reset, but there will also be new roles created. It is time to learn and pivot.

Insider Selling and Market Sentiment

While much of the market’s attention is focused on the ongoing conflict involving Iran, there are other critical factors to monitor. Notably, corporate insiders have continued to sell off their holdings. Insider selling can signal various motivations, and while individuals typically purchase shares for a single reason—confidence in the future of the business—they may sell for a multitude of reasons. However, the recent lack of insider buying is notable and raises questions about whether this trend is merely profit-taking or if it reflects broader concerns about the outlook for individual businesses or the economy as a whole.

Geopolitical Risks in the Middle East

Turning back to the conflict in the Middle East, the prospect of a prolonged military engagement poses unique challenges for the United States, particularly in terms of the strain it places on supply chains and manufacturing capacity. Reports from Israeli news agencies have suggested that Turkey could be the next target in the escalation, which adds to the regional instability. There is growing uncertainty over whether the United States will be drawn into an extended conflict, and concerns are mounting about the spillover effects of Iran’s actions on neighbouring countries. Such instability may prompt businesses to relocate operations out of the region, with Southeast Asia—especially Singapore—emerging as a potential beneficiary, particularly in the growth of family offices. The key question remains whether additional countries will become involved in the conflict or if a path to peace will soon emerge.

Economic Data and Market Implications

Recent Producer Price Index (PPI) data point to persistent inflationary pressures faced by producers. This, combined with a quarterly GDP growth rate of just 1.4%—a significant drop from the previous quarter’s 4.4%—raises concerns for the market, particularly as more news of layoffs is anticipated. At the same time, advancements in agentic AI technologies are garnering considerable interest, with expectations that these innovations could be deflationary as automation reduces resource needs and reallocates work. Despite these efficiencies, there are legitimate concerns regarding data privacy, security, governance, and ethics. The increasing autonomy of agentic AI systems means that robust ethical oversight and governance frameworks are essential to prevent unintended consequences, such as data loss caused by insufficient safeguards or poorly defined instructions.

Broader Societal and Market Issues

Beyond economic and geopolitical developments, there are ongoing societal concerns, such as the unresolved issues surrounding the Epstein file, with public demand for accountability and further investigation remaining high. In the United States, persistent affordability challenges are undermining confidence in the current systems of capitalism and democracy. Amid these uncertainties and the ongoing noise generated by military conflict, it is important to continue monitoring market developments—particularly the rapid evolution of the private capital market, illustrated by recent activities in firms such as MFS and Blue Owl.

Financial Strategy and Outlook

Let us spend within our means, invest only what we can afford to lose, and avoid leverage. Let us review our current holdings with the intention of divesting from businesses that are losing their competitive advantages. Additionally, I will consider adding both hedging strategies and defensive positions to our portfolio to mitigate risk.

As we move forward, it is crucial to conduct thorough due diligence before assuming any new responsibilities.

Wishing everyone a successful week ahead.

(Written by me, refined by AI).

@TigerStars

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