Mass Layoffs and Bankruptcies Happening… The Market Wants to Trap you Before the Next Big Move… The Public is in the Dark, This Could be the Worst Financial Event Anyone has Ever Seen
Mass Layoffs and Bankruptcies Happening… The Market Wants to Trap you Before the Next Big Move… The Public is in the Dark, This Could be the Worst Financial Event Anyone has Ever Seen
A ‘volatility event’ will plunge the stock market to new lows in the next 6 months, Fairlead’s Katie Stockton says
– The stock market is poised to plunge to new lows in the first half of 2023, according to Fairlead Strategies’ Katie Stockton.
– Stockton told CNBC on Tuesday that a “volatility event” could send the VIX soaring to 50.
– “The seasonal influences are sort of petering off here in terms of that Santa Claus rally, so we’re losing that tailwind,” Stockton said.
Investors should brace for more pain in 2023 if a forecast from Fairlead Strategies’ co-founder Katie Stockton proves correct.
Stockton told CNBC on Tuesday that she expects a “volatility event” to plunge the stock market to new lows in the first half of 2023, as the VIX Index, known for measuring fear among stock market investors, punches through resistance in the mid-30s and soars to as high as 50.
“We’re looking for a volatility event potentially this month into next month. The seasonal influences are sort of petering off here in terms of that Santa Claus rally, so we’re losing that tailwin,” Stockton said.
While Stockton didn’t theorize what fundamental factors could be behind a volatility event, plenty of Wall Street strategists remain concerned about stubbornly high inflation, the Fed continuing to hike interest rates, and the likelihood of companies seeing an earnings recession.
Stockton sees an 80% chance that the stock market falls to new lows in 2023, and said “new highs are not likely this year” as the market consolidates and finds its footing from last year’s steep sell-off.
“I do expect this year to be an inflection year, and that makes it really hard to predict where we might see the S&P 500 at year-end,” Stockton said. “But we do look for some kind of major low to be established on the back of a volatility event… maybe in the next four to six months.”
Of course, there is a chance hat instead of plunging to new lows the stock market simply chops sideways and consolidates. But Stockton doesn’t see that as a likely scenario because capitulation is usually what’s needed to end a bear market.
“It could be sideways action. I think it’s less likely though because I do think that the market needs that kind of capitulation that tends to be associated with bear market lows,” Stockton said.
“We need that volatility event. We need the VIX perhaps even close to 50 before we can really get out of this down trending mode. The long-term momentum is still very much to the downside.”
Stitch Fix plans 20% job cuts as CEO steps down, founder Katrina Lake to reassume post
– Stitch Fix founder Katrina Lake announced the company will be cutting 20% of its salaried workforce.
– Lake will also reassume her post as CEO. The brand’s current CEO, Elizabeth Spaulding, will be stepping down effective immediately.
– Stitch Fix has seen waning sales and failed initiatives after a Covid pandemic boom.
Stitch Fix founder Katrina Lake on Thursday told employees the company will be cutting 20% of its salaried workforce and she will reassume her post as CEO as the fledgling apparel company continues to grapple with low sales, a dwindling customer base and a reduced market cap.
The brand’s current CEO, Elizabeth Spaulding, who joined the company as president in 2020 and took over as CEO in August 2021, will be stepping down effective immediately, Lake said.
“I will be stepping in as interim CEO and leading the search process for our next CEO,” Lake said Thursday. “Despite the challenging moment we are in right now, the board and I still deeply believe in the Stitch Fix business, mission and vision.”
Shares of the company surged roughly 9% Thursday after the announcements and its market cap hovered around $386 million. Shares closed more than 9% higher at $3.50.
Stitch Fix, which sells curated boxes of clothing on a subscription basis, won big during the Covid pandemic after stuck-at-home consumers, newly flush with cash, took advantage of the service to update their wardrobes. But as shoppers ventured back out into the world, sales dropped and new strategies led by Spaulding failed.
Shortly after taking over as CEO, Spaulding led the rollout of a direct-buy option, called Freestyle, that allowed customers to purchase items directly from the company with the hopes they’d be won over as regular subscribers. But the initiative stalled and in June, the company announced it’d be laying off about 15% of salaried workers, or about 330 people.
The cuts left Stitch Fix with about 1,700 salaried employees, as of June.
Neil Saunders, managing director of GlobalData and a retail analyst, said in a statement Thursday that the company looks to have “lost its way” and that the issues it’s facing are neither temporary nor immediately solvable.
“This is one of the reasons why the company has announced the termination of around 20% of its salaried positions – an action it hopes will help to stem losses and put the company on a better financial footing,” Saunders said.
Stitch Fix employees learned about the job cuts Thursday morning and were told the brand’s Salt Lake City distribution center, which has been open for just over a year, will also be shuttering. Approximately 150 employees at that center will also be laid off, according to an employee at the facility. The person spoke on the condition of anonymity because they are not authorized to speak about internal matters.
Staff at the Utah distribution center, which opened three months after Freestyle was launched in December 2021, got the news during their all-hands monthly meeting on Thursday morning, the worker said. Staff were “caught off guard” and surprised to hear about the layoffs because the facility hadn’t been open that long, the employee said.
“They did good in my opinion. We had [an] all hands right before work and [they] gave us a packet with all the info we needed from final dates to severance. They even had a translator for our Spanish speakers,” the worker told CNBC, adding they felt “overwhelmed” by the news.
When Stitch Fix shut down another distribution center in the past, some workers were given the option to relocate to different facilities within the company. It wasn’t an option this time around for workers at the Salt Lake City center, the worker said.
Salaried employees affected by the cuts will receive at least 12 weeks of pay, which increases with tenure, and health care and mental wellness support will continue through April 2023, Lake said.
Lake told staffers she was “truly sorry” for the cuts and thanked them for their “hard work” and “dedication.”
As founder, Lake has a unique perspective on the company and its potential, but she will have to contend with a consumer environment that has significantly shifted over the last year and a looming recession that’ll see shoppers reduce their spending on discretionary items like new clothes.
Amazon says it will cut over 18,000 jobs, more than initially planned
– Amazon, one of the largest employers in the U.S., is scaling back more than it had anticipated.
– Andy Jassy, Amazon’s CEO, said an employee leaked the plans, prompting him to make a public announcement.
– “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy wrote in a memo.
Andy Jassy, CEO of Amazon Web Services.
Amazon said Wednesday it will cut more than 18,000 jobs, a bigger number than the e-retailer initially said it would be eliminating last year.
The Wall Street Journal reported on the cuts earlier, which Amazon said preempted its planned announcement.
“We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted,” CEO Andy Jassy wrote in a memo to employees that the company published on its blog. “However, because one of our teammates leaked this information externally, we decided it was better to share this news earlier so you can hear the details directly from me.”
Tech companies are picking up in 2023 where they left off last year, preparing for an extended economic downturn. Salesforce
said Wednesday it would reduce head count by 10%, impacting more than 7,000 employees. Both Amazon and Salesforce admitted they hired too rapidly during the Covid pandemic.
Amazon specifically acknowledged that it had added workers too quickly in warehouses as consumers shifted to online ordering. The company employed 1.54 million people at the end of the third quarter.
In November, Jassy said Amazon would eliminate roles, including at its physical stores and in its devices and books divisions. CNBC reported at the time that Amazon was looking to lay off around 10,000 of its employees. Now the number is higher.
“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy wrote. “These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles.”
Amazon plans to inform employees who will lose their jobs starting Jan. 18, Jassy wrote, noting that most cuts will come in the stores and People, Experience, and Technology (PXT) groups.
BREAKING NEWS:
CREDIT DEFAULTS ARE SET TO MORE THAN DOUBLE IN EUROPE THIS YEAR TO LEVELS APPROACHING THE WORST DAYS OF THE GLOBAL CORONAVIRUS PANDEMIC
2023 has arrived.
— Gold Telegraph ⚡ (@GoldTelegraph_) January 4, 2023
Recession will hit a third of the world this year, IMF chief has said.
— unusual_whales (@unusual_whales) January 5, 2023
FED SWAPS RATE RISES AS HIGH AS 5.07% FOR JUNE 2023 CONTRACTS.
— FinancialJuice (@financialjuice) January 5, 2023
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