The market started off a bit slow yesterday morning as it broadly braced for the jobless claims report numbers to be delivered at 0830.
Claims surged to October 2021 highs, reaching a whooping 261,000.
This could be a leading indicator that the jobs market is softening. While it will be painful for many, it shouldn’t come as a great surprise.
I’ve written articles over the past several months highlighting some of the biggest companies out lightening their workforce.
I have Corporate America clients and friends that have personally suffered from these layoffs.
If the layoff wasn’t bad enough, trying to replace their job is near impossible in today’s environment.
Many feel as though this is an attack on the working population when it’s really just a cycle that naturally occurs in business.
The earth cycles, the climate cycles, the stock market cycles, the real estate market cycles, the jobs market cycles . . . cycles are unavoidable.
The folks who utilize these cycles to their advantage are the ones who are often better off.
If you’re looking to enter the stock or real estate markets, it’s better to enter on a down cycle.
Inversely, if you’re looking to exit the stock or real estate markets, it’s better to exit on an up cycle.
Believe it or not, maximizing the liquidation of your holdings is done this way. Timing is more important than your selection in most cases.
Just look at the recent real estate boom — it’s due to contraction as it expanded beyond an affordable level.
If you had something to sell, 2 years or so ago was the time to sell it.
Similarly in the automobile industry, if you have a vehicle to sell — doing it before that market starts to cycle down would be best.
When you plan to hold something, you want to buy it in a down cycle and sell it in an up cycle. Focus more on the timing. You’ll thank yourself!
After a super strong jobs market, it’s bound to cycle downward. That’s what we’re starting to see and it should not be a great surprise.
A business is a living thing. It expands and contracts within the environment that it exists.
That environment includes every tiny component you could think of, all the way down to the cost of the toilet paper in the office bathroom.
When the business contracts, so does its need for employees.
A friend of mine owns one of the largest mortgage brokerages around. Through the real estate market surge his company doubled its employment capacity up to nearly 500 employees.
The real estate demand has slowed down, his employee count is below where it was before it exploded and dropping quarterly.
It’s not the employees fault that the real estate market demand had fallen because prices had cycled too high leading to their layoff.
But they were a byproduct of it. It is what it is.
Many of you may ask why I dedicate my life to helping traders. The simple answer is: so they can fend for themselves in all market conditions.
Yep, that’s my goal — to empower them to provide for themselves so they never have to be the victim of the down cycle of the jobs market again.