News and my thoughts from last week (02Jun25)
CEOs are anticipating a recession in the US: 83% of 133 surveyed CEOs expect a recession over the next 12-18 months, in line with 2022 levels. 12% expect a deep US recession with material global spillover. - X user Global Markets Investor
Billionaire Warren Buffett Pours $305,500,000,000 Into 'Safe Haven' Assets While Dumping Stakes in Citigroup, Bank of America and Capital One - The Daily Hodl
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From X user Amanda Goodall
Netanyahu orders Israeli Air Force to prepare for a launch attack against Iran WITHOUT U.S. support. Source: Ynet.
Don't be careful. Be competent - Tom Cruise.
The Federal Reserve stated that the risks of both inflation and unemployment are high, and that it remains vigilant, monitoring developments that might exacerbate either risk. The FOMC chose to hold the fed funds rate steady in the target range of 4.25% to 4.50%, without making any commitments to cuts or rate hikes at this time. - Yahoo Finance
Peter Thiel and Jerome Powell sound the alarm for US housing. This sharp rise in home prices creates significant challenges for prospective buyers, but renters aren’t immune to the impact either. It’s all part of the broader cost-of-living crisis gripping many Americans. - Yahoo Finance
Container Shipping Industry Posts $9.9 Billion Q1 Profit as Red Sea Crisis Impact Wanes. Supply Chain profits from crisis. - Gcaptain
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The US Money Supply hit an all-time high in April for the first time in three years. After a brief hiatus, money printing is back. - Charlie Bilello
My Investing Muse (02Jun25)
Layoffs & Closure news
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Canada’s oldest company is set to shut the doors of all 80 of its stores and lay off some 8,000 employees by June 1 — marking an end to a 355-year legacy closely tied to the origins of Canada. - The Star
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Morgan Stanley is preparing to lay off approximately 230 employees across seven offices in New York City, signalling another round of staff reductions as the financial services giant seeks to streamline operations amid a challenging economic environment, reports Citywire. - People Matters (IN)
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McKinsey confirms over 5,000 layoffs in massive reset of global workforce - People Matters (IN)
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Volvo Cars is laying off 3,000 employees globally, citing cost-cutting efforts amid trade tensions and economic uncertainty. The move comes as the industry faces pressure from 25% U.S. tariffs on cars and steel, rising raw material costs, and a shrinking European market. - X user The Layoff Tracker
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Cargill Inc. will shut down its Springdale, AR Turkey plant, laying off about 1,000 employees on August 1, 2025. 108 turkey farmers will also be impacted. This closure was announced in January and confirmed in May. - X user The Layoff Tracker
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Chicago Public Schools is laying off over 530 math and literacy tutors due to a $529 million budget deficit and the end of federal funding that supported the tutoring program since 2021. Tutoring will now be limited to 55 middle schools. Layoff will be effective on May 30, 2025 - X user The Layoff Tracker
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The above are some news items about layoffs and closures. As tariffs negotiation drags on, the collateral to businesses (especially smaller ones) can compound.
The International Tariff Tension
Here is some recent news about global trade tension:
Treasury Secretary Bessent says trade talks with China have "stalled." - WatcherGuru
“China is an adversary, but what I really worry about is the enemy within. Can we get our own act together, our own values and capabilities. This time is different… we have to get our act together and quickly.” - Jamie Dimon
The US has paused exports of chip software and jet engine technology to China. This comes hours after President Trump ordered US chip designers to stop selling to China. Is the US-China trade war ramping up again? - X user The Kobeissi Letter
Modi is calling on Indians to boycott Chinese products, using a racial slur (small eyes) to name China. He forgets that in the whole of Northeast India, people have small eyes. - X user Ashok Swain
TRUMP TO PAKISTAN AND INDIA: NO TRADE DEAL IF THE FIGHT CONTINUES Trump says Pakistan will visit the United States next week to discuss tariffs. Pakistan faces a 29% tariff on its exports because of a $3 billion trade surplus with the United States. India is also stuck with a 26% tariff. - X user Mario Nawfal
“Port delays are stretching transit times, disrupting inventory planning and pushing shippers to carry extra stock,” Drewry said. “Adding to the pressure, the transpacific eastbound trade is showing signs of an early peak season, fuelled by a 90-day pause in US–China tariffs, set to expire on Aug 14.” - The Edge Malaysia
NVIDIA CEO Jensen Huang just admitted the unthinkable: China’s AI rivals have become formidable. U.S. sanctions failed to stop them. Huawei’s latest AI chips are now comparable to NVIDIA’s H200. And what’s worse for Washington? Huang says: “China used to be 95% of our market. Now just 50%.” “China has half of the world’s AI researchers.” “They’re filling the gap we left and growing exponentially.” Bonus quote (translated): “I hope every AI developer in the world builds on America’s tech stack.” Translation? You’re allowed to innovate - as long as it’s on our platform, our chips, our control. But China said no. We’re not just building models. We’re building sovereignty. (Source: X user Corrine)
President Trump said he will double steel and aluminium levies to 50%, intensifying the global trade war - Reuters
“The US plans to blackmail the entire world with tariffs if they trade with Russia” Lindsey Graham and Blumenthal announced 500% tariff on everyone who is going to buy oil from Russia Especially China and India. Multiple US media outlets have already reported that the Senate has a majority for this plan and that Trump cannot stop it. - X user Megatron
The world continues to experience volatility, with India starting to “boycott” Chinese products. Tariffs are largely inflationary, and these should add to the cost of living.
My final thoughts
Tariff tension has spread to other regions like Europe and India. We can expect new trading blocs to be formed as companies explore new customers, suppliers and countries. It was reported that the talks between America and China have stalled. This has rattled the market slightly.
I am monitoring the bond market (in both Japan and America). With the increase in M2 money supply, will this lead to the USD’s devaluation? How will this complicate the volatile market dealing with tariffs and military hotspots? This has led me to liquidate more USD-denominated positions.
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.
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