The Long Term Investor

I mentioned employers cutting jobs the other day. Just because there are a lot of $15 per hour jobs out there does not mean it is a safe time to screw around with your job. I suspect that there is going to be many lay offs in the higher end jobs. I also suspect that the jobs market.....especially in the higher end jobs.....will turn on a dime and leave a lot of people without a chair in the current game of employment musical chairs.

U.S. tech sector sees highest job cuts in May since Dec. 2020 - report

https://finance.yahoo.com/news/u-tech-sector-sees-highest-180258108.html

"(Reuters) - U.S. employers in the technology sector cut nearly nine times more jobs in May than in the first four months of the year as rising inflation and slowing demand force companies to cut corners.

Though overall layoffs in the country reported by global outplacement firm Challenger, Gray & Christmas on Thursday fell 14.7% in May from April, thanks to strong demand in the labor market, the technology sector cut 4,044 jobs, up from the 459 between January and April.

It is the highest monthly total since December 2020 when tech companies cut as many as 5,253 jobs.

"Many technology startups that saw tremendous growth in 2020, particularly in the real estate, financial, and delivery sectors, are beginning to see a slowdown in users, and coupled with inflation and interest rate concerns, are restructuring their workforces to cut costs," said Andrew Challenger, senior vice president of challenger, Gray & Christmas.

U.S. tech layoffs and sector performance https://fingfx.thomsonreuters.com/gfx/mkt/gdpzyeeebvw/Pasted image 1654184823489.png

The impact of the Ukraine crisis, a four-decade high inflation and rising interest rates has led to forecast cuts by companies such as Snap Inc and Microsoft, while others like Meta Platforms Inc have slowed hiring to rein in costs.

Fintech companies also announced 268% more job cuts in May than in the first four months of 2022, the report from Challenger, Gray & Christmas said.

However, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week. Initial claims for state unemployment benefits fell 11,000 to a seasonally adjusted 200,000 for the week ended May 28, the Labor Department said on Thursday."

MY COMMENT

When the crunch comes it will happen very quickly and out of nowhere. People will be surprised and will be caught off guard. It is the same thing when real estate collapses. I have seen the property markets seem to collapse in just the span of a few weeks in the past.

I am also VERY SURE.....that many will come to deeply regret.....work from home. It will allow companies....especially tech companies.....to cut costs by having foreign work forces working outside the USA. The cost savings will be HUGE. For spoiled American workers....it will be a disaster of their own making.

 

Today was a good day. The markets did not just give up, roll over, and take it. They fought back from what could have been a very nasty day with some of the economic data and the Microsoft announcement.

We are seeing some strength and fight in the markets lately, that is a good sign. I am not saying that the drop is over......it will be a week to week situation for some months to come. BUT....today showed that there is some light starting to show at the end of the tunnel. The question is.....how long is the tunnel?

 

A significant KILLER day today in the markets for my account. I was totally in the green across the board. Every position.......except for Microsoft +0.79% and Apple +1.68%......was up between +2.67% on the low end and +6.94% on the high end.

I have now managed to cut my year to date loss to (-18.80%). Not that I am actively doing something.....I am just allowing the markets to take me there by doing.....NOTHING.

What was really nice was to get in a beat on the SP500 by 1.80%.....on a day when the SP500 was up big.

The SP500 is now year to date showing a loss of (-12.37%)

 

I see a strong....probability....that we will have another nice green day tomorrow and with a little LUCK......we might put together a two week GREEN RUN in the markets.

Again......WE DESERVE IT.

 

Here is the good news of today in the markets.

Dow jumps 400 points, Nasdaq adds more than 2% to cut two-day losing streak

https://www.cnbc.com/2022/06/01/sto...investors-dwell-on-health-of-the-economy.html

(BOLD is my opinion OR what I consider important content)

"U.S. stocks rose Thursday after an intraday comeback as the three major indexes each snapped two-day losing streaks.

The Dow Jones Industrial Average added 435.05 points, or 1.3%, to close at 33,248.28. The S&P 500 gained 1.8% to 4,176.82. The tech-heavy Nasdaq Composite advanced 2.7% to 12,316.90.

The three averages are now on pace for a positive week. The Dow is up 0.1%. The S&P 500 inched up 0.5%, and the Nasdaq Composite rose 1.5% week to date.

“Bearish sentiment remains overdone, and a lot of the upcoming profit warnings should mostly be already priced in. Stocks should start to eventually push higher this summer as economic activity moderates,” said Edward Moya, senior analyst with OANDA.

The indexes are now solidly off their lows of the year. The Dow is 8.5% higher, the S&P 500 is up 9.6% and the Nasdaq Composite rallied 11.6% from their respective 52-week lows.

Thursday saw another rocky session on Wall Street with the stock averages oscillating between losses and gains. The Dow was down more than 300 points at its lows of the session.

“The market is on pins and needles waiting to find out if inflation will come down and give us some respite from the Fed rate hike regimen. That’s why we have this choppiness. It’s a period of great uncertainty,” Barry Bannister, Stifel chief equity strategist, said.

Fed Vice Chair Lael Brainard on Thursday said it is unlikely the central bank will take a break from its current rate hiking cycle anytime soon.

“Right now, it’s very hard to see the cause for a pause,” Brainard told CNBC’s Sara Eisen during a “Squawk on the Street” interview. “We’ve still got a lot of work to do to get inflation down to our 2% target.”

Elsewhere, Microsoft warned revenue and earnings this quarter would fall short of analysts’ estimates. The stock initially fell, but made up losses to close with a 0.8% gain on the day.

Other technology names rose and boosted the Nasdaq. Nvidia gained 6.9%. Zoom rose about 4.3%, and Tesla added nearly 4.7%.

Meta Platforms edged 5.4% higher a day after Sheryl Sandberg announced she is stepping down from her role as chief operating officer.

Traders also parsed through corporate earnings results. Shares of pet retailer Chewy surged about 24% after the company reported strong quarterly results. Meanwhile, Hewlett Packard Enterprise fell 5.2% following slight misses on both earnings and revenue.

Investors eyed employment data showing that job creation pace of the pandemic-era recovery. Private sector employment rose by just 128,000 in May, ADP reported Thursday, falling well short of the 299,000 Dow Jones estimate. In another report Thursday, initial jobless claims last week fell and came in below expectations, according to the Labor Department.

The closely-watched jobs report for May is slated for release Friday morning. Economists expect 328,000 nonfarm jobs were added in the latest month, compared with 428,000 in April."

MY COMMENT

I will take the win.......celebrate......and move on. Tomorrow is a new day and the end of the week.

 

My painting that is off at exhibition will be coming home at the end of this month. It will be nice to get it back and up on the wall where it is safe. A month or so later....another painting will be picked up by the art shipping company to head to another exhibition. That one will be gone for much longer time. Unfortunately for me......that painting is one of my favorites and I will really miss it.

I am willing to pay the price of having it gone in return for the publicity and PR for the painting. I also think it is important for the temporary custodian of art to make it available to be seen by the public. It has been in many exhibitions and it will be nice to add another one to the list.

I worry about them being shipped....even though the professional art shippers know what they are doing. It is a dangerous time in the life of a painting....being shipped and handled....even by experienced people and museums. They provide insurance.....but money can not replace a one of a kind item. It will be a good feeling when it comes.......safely....... back home in 2023.

 

Those are beautiful....classic.....bear market charts Zukodany. I invested during all of them except for 1929 of course. They illustrate exactly why I believe we......"could"..... have another 4-12 months and as much as another 10 to 25% on the down side facing us in the current market.

OR.....we may not. There is no way to tell what is going to happen till it is hindsight. As i continue to say......the market direction at the moment is still....negative.

I was talking about jobs evaporating quickly yesterday.....look at the Tesla news today. Hope springs eternal....but you have to live in the real world.

We are in the perfect storm of circumstances. The largest component being....incompetent government pushing incompetent/fantasy policies. I dont care what you "think" is reality........I care about ACTUAL REALITY.

 

I have said many, many times in this thread that the human brain craves complexity......and.....the key to investing is to keep it simple. So....I like this little article....it speaks the truth.

In Investing, Simple Beats Complex

https://www.safalniveshak.com/simple-beats-complex-in-investing/

(BOLD is my opinion OR what I consider important content)

"In the endnotes of his brilliant book, Winning the Loser’s Game, Charles Ellis wrote about two of his best friends who, at the peak of their distinguished careers in medicine, agreed that the two most important discoveries in medical history were penicillin and washing hands (which stopped the spreading of infection from one mother to another via the midwives who delivered most babies before 1900).

Ellis’s friends also counseled him there was no better advice on how to live longer than to quit smoking and to buckle up when driving.


The lesson Ellis leaves the reader with is this –


Advice doesn’t have to be complicated to be good.

I have been in the markets for 19 years, which has been a good enough time to make me aware of a profound investor bias toward complexity. Over these years, I have seen too many investors trying to fight complexity by adding even more complexity into their investment process.

The world is complex. Consider the various reasons floating around explaining the market’s fall in the last two months – war, inflation, interest rates, FII selling, China, supply chain disruptions, weak GDP, and over valuations. This is not a complete list, but enough to suggest that the world is complex. And so are financial markets.

How do you deal with such complexity in your wealth creation journey without losing your sanity?


Have an investment process that is elegant in its simplicity.

Of course, this goes against common belief that your investment process must be complex to be profitable. This is because, like the Dutch computing science pioneer Edsger W. Dijkstra said, “Complexity sells better.” Against that, “simplicity requires hard work to achieve it and education to appreciate it.” And not many investors would want to walk on that road less travelled.

Also, a research paper titled The Confounding Bias for Investment Complexity argued that “a preference for complexity is almost hardwired into investors, their agents, and asset managers because the intuition is that a complicated investment landscape requires a complex solution; a complex strategy also supports a higher fee from both agents and managers.”

This is even when “simplicity leads to better investor outcomes not because simplicity in and of itself produces better investment returns, but because a simple strategy encourages investors to own their decisions and to less frequently overreact to short-term noise.”

So, what’s a simple investment strategy that also works?

Let me keep it simple and share with you the ten-parts strategy outlined by John Bogle in his book The Clash of the Cultures.

It’s simple and it works. I can vouch from my 19 years’ experience in practicing, and profitably, most of what Bogle advised –

1. Remember reversion to the mean: Selecting your investments looking just that the past is dangerous. Markets are like a pendulum. And like Ben Graham quoted Horace said at the start of his book Security Analysis, “Many shall be restored that are now fallen and many shall fall that are now in honor.” People forget that markets are mean reverting when returns get way ahead of the fundamentals, and everyone’s getting rich. But, like with Cinderella at the ball, the clock does strike 12, and everything turns into pumpkins and mice.
2. Time is your friend, impulse is your enemy: Time is your greatest ally in the compounding journey. Take advantage of it. Against this, impulsive actions like timing the market, buying what’s hot, selling what’s plunging, etc. are your enemies. Avoid such impulsiveness.
3. Buy right and hold tight: ‘Buy and hold’ does not mean ‘buy and forget.’ If you have done your work well, and the business continues to do well, hold on to it tight Thinking (actually) like an owner should help here.
4. Have realistic expectations: There are two sources of stock market return – one, investment return and two, speculative return. The former depends on the underlying business you own – its growth, profitability, return on capital, balance sheet strength. The latter depends on the speculative tendencies of the market participants. We get into trouble when we base our expectations on speculative return, for that is largely based on the opinion of others. Focusing on what the business is doing and basing our return expectations on that is the way to go.
5. Forget the needle, buy the haystack: This is where I have changed my mind in the last few years. The haystack Bogle refers to here is the “market” and he’s advising to buy index funds that track the broader market instead of trying to find individual stocks (needles). If you are a “know-nothing” investor, or someone looking to diversify outside general equity funds, a broad-based, low-cost index fund or ETF is a good idea.
6. Minimize the croupier’s take: Bogle write in his book, “After the heavy costs of financial intermediation (commissions, spreads, management fees, taxes, etc.) are deducted, beating the stock market is inevitably a loser’s game for investors as a group…[like] after the croupiers’ wide rakes descend, beating the casino is inevitably a loser’s game for gamblers as a group.” When you focus on the potential returns on an investment, also consider the cost you would incur over its lifetime. Reduce the costs from the potential returns, for that is the rate at which your money would compound. High cost is the reason I don’t advice PMS services. Keep it simple. Find a good, well-diversified equity fund with much lower costs, and invest there.
7. There’s no escaping risk: However smart and experienced an investor you are, there is no escaping risk while investing in the stock market. Bogle writes, “When you decide to put your money to work to build long-term wealth, you are not deciding whether or not to take risk, for risk is everywhere. What you must decide is what kind of risk you wish to take.”
8. Beware of fighting the last war: We suffer from recency bias, and often decide to invest looking at how things have been in the recent past (like looking at recent stock price movements). Past is a great teacher and an indicator of what may come, but you should not expect the recent past to continue into the future. That happens only in excel sheets, not in real life.
9. The hedgehog bests the fox: Bogle writes, “The Greek poet Archilochus tells us that the fox knows many things, but the hedgehog knows one great thing. The fox – artful, sly, and astute – represents the financial institution with investment professionals who know many things (or at least sincerely believe that they do) about complex markets and sophisticated strategies. The hedgehog – whose sharp spines give it almost impregnable armor when it curls into a ball – is the financial institution that knows only one great thing: Long-term investment success is based on simplicity.” Be the hedgehog.
10. Stay the course: Most people who start into investing with a sound process fall prey to the emotions of envy, greed, fear, and abandon their process. The ones who do well in the long run are those who stay the course, come what may. Of course, a process must evolve with time, but sticking to what you think is best for you and what works in the long run is what matters.

Oliver Wendell Holmes, the American physician, poet, and humorist, said –

I wouldn’t give a fig for the simplicity on this side of complexity, but would give my life for the simplicity on the other side of complexity.

Simple can be harder than complex. You have to work hard to get your thinking clean to make it simple. But then, as Steve Jobs said in an interview in 1988, “…it’s worth it in the end because once you get there, you can move mountains.”

That’s also true for investing for wealth creation. In practicing simplicity, and staying the course, over time you can also move mountains."

MY COMMENT

Investing is so simple. Buy reasonable and realistic stocks and funds that represent the cream of the crop. Hold them as long as they fit that definition. Avoid trading and market timing. Simply let long term compounding do what it always does.

For most people.....this is an impossibility.

 

Siting and reading and listening to the financial news on the TV in the background. Waiting for the markets to clarify the direction today. It is a typical news and media driven market so far today. Which means......down....at the moment. Where we close and why......no one knows.

 

I was talking about how quickly jobs can evaporate yesterday. Those playing the jobs game of musical chairs might end up with a very rude awakening in the near future.

Musk says Tesla to pause hiring, wants to cut 10% of staff: report
The latest news comes just two days after the world's richest man told employees to return to the workplace or leave the company

https://www.foxbusiness.com/markets/musk-says-tesla-pause-hiring-cut-10-staff-report

(BOLD is my opinion OR what I consider important content)

Tesla will be pausing hiring worldwide and jobs cuts are coming at the electric carmaker.

Tesla CEO Elon Musk says he has a "super bad feeling" about the economy and wants to cut about 10% of jobs, according to an email to executives on Thursday seen by Reuters.

Shares of Tesla are down 3% in premarket trading.

The latest news comes just two days after the world's richest man told employees to return to the workplace or leave the company.

Tesla had around 100,000 employees at the end of 2021, according to its annual SEC filing.

The email was titled "pause all hiring worldwide."

Earlier this week, in another email, Musk said "Everyone at Tesla is required to spend a minimum of 40 hours in the office per week.

In late May, when asked by a Twitter user whether the economy was approaching a recession, Musk said, "Yes, but this is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen.""

MY COMMENT

This is called.....hunkering down. This is a no lose strategy. In the REAL world the stock would be UP on this news. It will make the company more lean and strong and productive. It will cut the dead wood. If we end up in a bad recession the company will be ready....if not they will STILL benefit from this move.

 

At the close today......it is AMAZON split day. YEA!!

 

There are a number of economic and other news items impacting the markets short term today.....here is a little summary.

Stock market news live updates: Stocks fall as investors mull strong May jobs report

https://finance.yahoo.com/news/stock-market-news-live-updates-june-3-2022-111552199.html

(BOLD is my opinion OR what I consider important content)

"U.S. stocks slid at Friday's open after May employment data showed a slower but still robust pace of hiring during the month.

The S&P 500 plunged 1.4%, while the Dow Jones Industrial Average shed nearly 300 points, or 0.9%. The Nasdaq Composite tumbled 1.9%. Meanwhile, the most notable move in markets following the jobs report came from the bond market, with the yield on 10-year Treasury climbing 7 basis points to 2.99% following the release.

The Labor Department’s monthly employment report showed the U.S. economy created 390,000 jobs in May, with the unemployment rate holding steady at 3.6%. Economists had expected a clip of 318,000 jobs with the unemployment rate falling to 3.5%.

"Overall, it seems like the job creation machine runs on full-steam and anecdotal evidence has it that hiring remains difficult for businesses of all sizes as demand outpaces supply," Christian Scherrmann, DWS’ U.S. Economist said in a note.

"Looking ahead, the Fed is most likely to feel reassured that it has struck the right balance lately," he added. "That, in turn, means it is likely to stick to its aggressive monetary normalization path."

In markets, shares of Tesla (TSLA) fell as much as 5% in pre-market trading after Reuters reported CEO Elon Musk warned of a "super bad feeling" about the economy and said the company is expected to trim about 10% of jobs in an email to executives.

Musk also motioned management to "pause all hiring worldwide" in the note. The electric-vehicle giant joins a growing docket of companies that have recently reported grappling with headwinds from macroeconomic uncertainty.

Musk’s warning comes just days after JPMorgan Chase (JPM) boss Jamie Dimon cautioned of a "hurricane" bearing down on the U.S. economy.

Elsewhere in markets, Lululemon (LULU) shares edged higher after the athletic apparel manufacturer revealed strong first-quarter earnings results and raised its outlook for 2022, also predicting continued strength in its business despite economic constraints that have hit some of its retail peers.

9:35 a.m. ET: Stocks slide as investors mull better-than-expected May employment data

8:51 a.m. ET: A few early highlights from a first pass at the jobs report

The headline numbers on the May jobs report were right down the middle.

But underneath the surface we've got a few indications of where the winds are blowing in a dynamic U.S. labor market.

The number of workers employed in retail fell by 60,700 last month, a sign we're likely to see folks interpret as indicative of a softening consumer backdrop. The 47,000-worker increase in transportation and warehousing, however, suggests the Amazon side of the retail economy remains intact for now.

Industry-level data also shows leisure & hospitality logged the biggest gains last month, which comes as little surprise given the indications we've seen from travel-related plays about their demand backdrop leading into the summer months.

In terms of labor market composition, a 211,000-worker decline in the labor force is notable, as retirements were seen as a headwind last year to the labor market making a full and timely recovery from the pandemic-induced shock.

The duration of unemployment data also gives us an interesting look at the "barbell" structure of the labor market right now — more than 100,000 fewer workers were classified as either unemployed for less than 5 weeks or unemployed for more than 27 weeks. So we see the short-term and long-term unemployed decline as a portion of the overall unemployed population, and from this we could see an argument being made that this remains an "anyone who wants a job can get a job" kind of labor market recovery."

MY COMMENT

We remain in a....BIG MESS. How is that for keeping it simple.

 

The ONLY thing I can say is......I remember very well the Jimmy Carter years. AND.....yes I voted for him. The lessons that I learned during those four years were a big lesson in reality for me and very formative for me in my investing and financial life.

I am not into mixing politics and investing in this thread. BUT......as I said....you have to recognize reality. AND....the reality is that in investing......government is a BIG FACTOR in the markets and business.....for better or worse. In the current case.....in terms of the markets and business....unfortunately my view is that the potential is for......much worse.

 

I think I agree with the business people that are in the trenches.....versus......a single, ivory tower, economist.

Bad news about hiring trends in tech is 'misleading': Economist

https://finance.yahoo.com/news/bad-...-tech-are-misleading-economist-162516212.html

(BOLD is my opinion OR what I consider important content)

"Tech's view on the global economy can be summed up in an email Elon Musk sent Thursday: "super bad feeling."

This week, Musk announced Tesla (TSLA) will be laying off 10% of its staff.

Amid this downbeat outlook for economic growth, prospects for workers dimmed in some pockets of the business world. Musk's comments follow JPMorgan (JPM) CEO Jamie Dimon's pronouncement earlier this week that a "hurricane" is bearing down on the U.S. economy.

But in the view of one economist, this growing drumbeat of negative news from the tech sector offers a "misleading" picture of the U.S. labor market right now.

"While the economy will undoubtedly slow in the coming months, anecdotal evidence of hiring freezes and layoffs at tech companies is misleading with overall job openings still near record-highs and layoffs at record-lows," Greg Daco, chief economist at EY-Parthenon, said Friday. "Even high frequency data from claims for unemployment benefits do not point to a severe labor market slowdown."

Friday morning, hours after Musk's warning made the rounds, the Labor Department reported nonfarm payrolls grew by 390,000 in the U.S. last month, more than had been expected by Wall Street. The unemployment rate in May held steady at 3.6%.

Musk's callout is far from the only sign that labor conditions for workers in the tech space have grown more challenging of late.

It also serves as the latest indication that this recovery is taking a far different shape than the rebound that followed the financial crisis.

In a blog post Thursday afternoon, Coinbase (COIN) announced not only will it be freezing new hires and backfills for the time being, it will now rescind job offers already accepted by some candidates.

"Two weeks ago, we paused hiring while we took time to reprioritize our hiring needs against our highest-priority business goals," said Coinbase's chief people officer L.J. Brock. "As these discussions have evolved, it’s become evident that we need to take more stringent measures to slow our headcount growth."

Tech giants ranging from Meta Platforms (FB) to Nvidia (NVDA) to Peloton (PTON) and Netflix (NFLX) have all announced some version of either a slowdown in hiring, a hiring freeze, or an outright headcount reduction.

As The Daily Shot flagged on Twitter this week, the number of news stories mentioning "hiring freeze" has exploded this month to the highest levels since the summer of 2020, when the economy was just emerging from a pandemic-induced recession.

The number of news articles mentioning “hiring freeze” jumped in May. pic.twitter.com/bL1fOKorqF

— (((The Daily Shot))) (@SoberLook) June 3, 2022

To be sure, a slowdown in hiring across the U.S. economy is the explicit goal of both the Biden administration and the Federal Reserve as policymakers work to bring down inflation down from 40-year highs. But monthly job gains are now roughly double the pace seen in the year before the pandemic.

While overall hiring was robust in May, employment in the retail sector declined. Combine retail's slowdown with signs from the tech world and we see clearly that pockets of the economy are leveling out after frenetic growth phases as the economy rebounded from the pandemic.

For now, however, a few high-flying, high-profile tech companies moderating their employment plans suggest workers are merely facing industry-level stressors much more than they suggest broader economic challenges ahead.

Whether this dynamic holds will be one of the most-discussed stories for investors this summer.

MY COMMENT

I am definately NOT going to believe an economic "consultant".....over the people that are actually running businesses.

It is a HUGE red flag that Tech companies and Retail companies are freezing or cutting back on hiring. These are the companies that are on the front line of the economy.

Wait and see.......in a few months we are going to see the usual people on TV talking about......."gee, how could anyone have known that good jobs were collapsing".

We are already seeing the early signs (above) that the FED working with GOVERNMENT is going to tank the economy. Of course as time goes by.......they will all be giving each other medals.......for winning the battle against inflation.....no one will mention the FACT that they accidentally TANKED THE ECONOMY to do it.......or the FACT that they caused the inflation to begin with. The REALITY will be that they did NOTHING......at least nothing good.

Dont worry....jobs will be just fine.....if you want to work in a service job for $15 per hour.

 

I was shopping at HEB today.....a Texas institution. What I was seeing was more empty shelves than I have seen in the last year. All sorts of different products were either not there or very skimpy.

This is anecdotal to Central Texas of course......but it also tells me that the supply chain is WORSE NOW than ever. Throughout the past year or so HEB was pretty well stocked till now.

Another....."little"....indicator of what "might" come.

 

Personally I think part of the reason for the MUSK announcement today was in preparation for the 10% or so of their work force that will be let go when they refuse to come back to on site work.

 

AND.....to continue on this theme of signs of......IMPENDING DOOM. Sorry......lets call it.... "signs of the coming recession".....assuming that it has not already started. I have a twisted sense of humor.

Dow Jones Falls As Apple Crumbles; Tesla Stock Plunges As Elon Musk Does This; 2 Leaders Make Bullish Moves

https://www.investors.com/market-tr...s-elon-musk-does-this-jobs-report/?src=A00220

(BOLD is my opinion OR what I consider important content)

"The Dow Jones Industrial Average dived following a stronger-than-hoped-for jobs report. Apple (AAPL) was the worst-hit blue chip. Tesla (TSLA) fell 9% after CEO Elon Musk announced a workforce shake-up. Amazon (AMZN) was also falling after a key executive resigned.

A couple of stocks still attempted to make bullish moves amid the painful action. New Fortress Energy (NFE) and Northrop Grumman (NCC) both tested buy points after forming bullish bases.

Volume was lower on both the Nasdaq and the New York Stock Exchange compared to the same time Thursday, a sliver of comfort.

Meanwhile, the yield on the benchmark 10-year Treasury note rose four basis points to 2.96%. West Texas Intermediate crude oil futures popped almost 2% to just under $119 per barrel.

Stocks were punished after new data from the Labor Department showed the U.S. economy added 390,000 jobs in May. This exceeded the 325,000 estimate from economists. The unemployment rate came in at 3.6%.

"The latest employment report showed slower job growth (versus April's number) and potentially softening inflation, but still keeps the door open for the Fed to continue with its rate hiking campaign well beyond the summer," Oanda senior market analyst Edward Moya said in a note to clients.

Nasdaq Slammed As Small Caps Fight Back

At 1:30 p.m. ET, the Nasdaq fell more than 2.4%, but moved mildly off lows for the day. Micron Technology (MU) was a major laggard as it dipped around 7%.

The S&P 500 was off lows as it skidded about 1.5% lower. American Airlines (AAL) struggled here as it fell around 7%.

The S&P sectors were mainly negative. Consumer discretionary and technology were the areas getting hit the hardest. Energy was the only positive as oil continues to gush higher.

Small-cap investors were fighting back against the hungry bears. The Russell 2000 was down less than 1%.

Yet growth stocks were holding up fairly well in comparison. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, was off lows as it slid fractionally lower.

Dow Jones Today: Apple Stock Turned Over

The Dow Jones Industrial Average fared best out of the major indexes but still gave up around 279 points, or just under 1%.

Apple stock was the worst performer on the blue chip index as it plunged nearly 4%. It was off lows for the day, though. AAPL stock remains below its major moving averages and is now testing support at the 10-day line, according to MarketSmith.

Chip giant Intel (INTC) was also lagging badly as it fell more than 2%.

Caterpillar (CAT) was shining brightest as it gained more than 1%. The construction machinery maker's stock is aiming to drive higher and move away from its 50-day moving average.

Tesla Stock Smashed As Elon Musk Slashes Jobs

Tesla stock's abysmal run in 2022 got even worse Friday as the stock slumped 9%. The move came in heavy volume.


The EV stock was hammered after CEO Elon Musk told employees via email that 10% of salaried employees are to be fired, Reuters reported.

"Tesla will be reducing salaried head count by 10% as we have become overstaffed in many areas," Musk said in his missive. "Note this does not apply to anyone actually building cars, battery packs or installing solar."

He also said that the firm will be increasing its head count of hourly-paid employees.

It comes after Musk said he had a "super bad feeling" about the economy.

He also previously said on Twitter that employees unwilling to spend a minimum of 40 hours in the office per week can "pretend to work somewhere else."

Tesla stock crashed beneath its 21-day exponential moving average and is now testing support at the 10-day line. It is miles below its major moving averages.

Tesla stock is even further off its current consolidation entry of 1,208.10, MarketSmith analysis shows.

Amazon Stock Falls As Key Executive Quits

Amazon stock was getting hit after it announced a key executive is to stand down.

The firm said in a filing that Dave Clark, the chief executive of the company's worldwide consumer business, is resigning as of July 1. He has been at the e-commerce giant for 23 years.

Clark has been an important right-hand for the firm's CEO Andy Jassy. He was a key figure in expanding Amazon's sprawling logistics network. A replacement has yet to be named.

"The past few years have been among the most challenging and unpredictable we've faced in the history of Amazon's Consumer business, and I'm particularly appreciative of Dave's leadership during that time," Jassy said in a blog post.

Clark said in a Tweet that it was time for him to "build again" after a fruitful spell at Amazon. He also said he is confident his teams have been "set up for success" in his stead.

Amazon stock was down about 2.5%. At 2,441, shares trade 35% off their 52-week peak of 3,773. AMZN looks set to end a six-session winning streak. AMZN remains shy of its key major moving averages, specifically the 50-day average and the 200-day line."

MY COMMENT

The last first.....AMAZON. Reading way.....between the lines......this is.....in my personal opinion..... not a routine leaving by a top executive. It is either someone BAILING OUT.........or.....being pushed out in some management power play. This executive has been with the company for 23 years.......and......"WAS".......a key right hand to the CEO. He is one of the primary powers behind the Amazon consumer business. This is NOT a good sign for Amazon or the consumer side of the company. It is also NOT a good vote of confidence in the new CEO.

As to the rest......the collapse of Apple, Tesla, Intel, etc, etc, etc......is telling us something. These are the companies that are the GUTS of our economy.......and.....the world economy.

 

Based on the above.....those that are house hunters......might be seeing a better market to buy a house in the not too distant future......perhaps 6-12 months down the road in many markets.