My Investing Muse (09Jun25)
Layoffs & Closure news
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Nearly 160 companies will be laying off employees throughout the month of June, exceeding the approximately 130 companies that did so in May. The layoffs will affect multiple industries, including retail, pharmaceutical, food and beverage, airlines, package delivery and more. Layoffs in the workforce vary by company, with some laying off between one and 25 employees; other companies, like U.S. Cellular, have larger cuts planned. - NewsWeek
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Microsoft cuts hundreds of jobs after firing 6,000 in May - Bloomberg
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Walt Disney Co. launched another deep round of layoffs on Monday, notifying several hundred Disney employees in the U.S. and abroad that their jobs were being eliminated amid an increasingly difficult economic environment for traditional television. - Los Angeles Times
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Warner Bros. Discovery, as its cable TV business continues to shrink and viewership falls, has made targeted job cuts across its linear networks. The media conglomerate’s linear TV business includes TNT, TBS, CNN, Food Network, Discovery, TLC, Cartoon Network and Turner Classic Movies. The layoffs affect well under 100 employees, a source familiar with the situation told Variety. - Variety
The above are some news items about layoffs and closures. As tariffs negotiation drags on, the collateral to businesses (especially smaller ones) can compound.
America’s Debt Spiral
Here is a collection of recent news about America’s debt situation":
USA’s national debt approaches $37 trillion
The US car market BUBBLE is popping: The 60-day delinquency rate for subprime auto loans hit 5% for the first time, and exceeded Financial Crisis levels. Auto loan SERIOUS delinquencies 90+ days hit 5% in Q1 2025, reaching the Financial Crisis high - X user Global Markets Investor
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It took over 200 years for the U.S. debt to reach $12 trillion. $12 trillion is how much we added in 4 years between 2020 and 2024. - X user The Rabbit Hole
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In this thread I want to give you an idea just how insane the current government spending is and how far we drifted away from any sustainable fiscal spending. This is all based on reported numbers and there are no assumptions/forecasts. In the current fiscal year, the government already spent $4,159 billion. This is for the first 7 months and the fiscal year ends in September. The latest available data is as of April. The already accrued deficit amounts to over $1 trillion: $1,049 billion. You can see in the chart how net interest expense has become the #2 largest spending category at $579 billion (for 7 months) after social security ($907 billion) and even exceeded national defense ($536 billion), health ($555 billion), and Medicare ($550 billion). The deficit is 34% of total receipts! (1049/3110) In other words: the government spent 34% more than it took in. - X user AJ
World debt rose $7.5 TRILLION in Q1 2025 to a RECORD $324 TRILLION. Emerging markets debt hit a RECORD of $106 trillion. Global debt-to-GDP ratio fell slightly to 325%. Emerging markets' debt-to-GDP hit a record 245% - X user Global Markets Investor
Debt is affecting America at various levels - consumer, federal government and even corporate. As the global reserve currency, any economic volatility can affect the rest of the world. Is this going to bond other countries together? Is this going to make other assets like cryptocurrency more popular?
My final thoughts
The partnership meltdown between President Trump and Elon Musk has dominated the recent news. How will this affect the market and the efforts of DOGE to minimise wastage in government spending? There are different claims and allegations made. This is not good for the market and enemies of the United States would be looking to exploit this further.
Source: https://nypost.com/2025/06/07/us-news/dhs-claims-lapd-waited-2-hours-to-respond-to-protests-over-immigration-raids/
Following the devastating Los Angeles fires, the streets of LA were set ablaze by protestors against the ICE operations. There were unrest and confrontations in different parts of LA. This is going to affect the business, tourism and safety in California.
The United States seems to be “fighting” on multiple fronts - on top of the tariff tensions, China-USA tensions, international student relationships, and multiple war fronts (that include Ukraine-Russia, Iran and Israel-Gaza). And yet, the S&P 500 closed at a recent high despite the recent run of treasury interest rates.
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Foreign investors withdrew a net -$37 billion out of US equities in May, the most in at least 12 months, according to Goldman Sachs. This marks the 2nd consecutive monthly net withdrawal after -$7 billion in April. Year-to-date, foreign investors have withdrawn a net -$31 billion from US equities. By comparison, these same investors bought a net +$201 billion in November and December last year. This comes even as the market recovers and the 90-day reciprocal tariff pause that began on April 10th. Foreigners are rotating out of US stocks. - X user The Kobeissi Letter
With the above, it is no wonder that most of the institutional investors are moving away from the USA.
Sometimes, no trade is the better trade. Is the market due for more profit-taking?
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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