My Investing Muse (13Jan2025)
Layoffs & Closure news
Based on performance, Microsoft is cutting a small percentage of jobs across departments. “When people are not performing, we take the appropriate action,” a Microsoft spokesperson said in an email, confirming the job cuts. - CNBC
Key Updates (from Google Gemini on 12Jan25):
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Decreasing Layoffs: Overall, the number of layoffs appears to be declining.
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Tech Industry Impact: The tech sector continues to be affected by layoffs, with several major companies announcing job cuts.
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Other Affected Sectors: Freight-related companies have also experienced recent job cuts.
One more tool for evaluating a company
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One of the most important insights for fundamental investors According to McKinsey >80% of companies with a high ROIC continue to have a high ROIC ten years later. - X user Hidden Monopolies.
S&P500 outlook
from FactSet X post
71 S&P500 companies have issued negative EPS guidance for Q4 2024, which is above the 5-year average of 56 and above the 10-year average of 62. - FactSet
If we view the market with average, the top 10 companies (including the Magnificent 7) can “skew” the outlook. This does not represent America alone as about 30% of S&P500’s revenue is from outside of America. This may “hide” some of the underperforming companies.
My final thoughts
Q4/2024 earnings season is upon us with the banks and financial institutions leading the way. What will move the market goes beyond the revenue and EPS. The outlook provided can have an impact to stock prices and market sentiments too.
My heart goes out to Los Angeles as they battle this fire. Hopefully, they are able to contain the fire and put in the necessary preventive measures.
Here is wishing all a healthy and successful 2025.
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