And Summer Begins…
There are many Wall Street proverbs, one of which is “Sell in May and Go Away.” If only we had. My new adage is “Watch what happens in May and have a drink.”
The Stock Market
This past week saw the S&P 500 Index – the 500 companies on US stock exchanges with the highest market value – swing from a high of 4088 to a low of 3811, a 6.7% swing in a 5 day period.
Many retail stocks got hammered because they reported higher costs resulting in lower profits. I’m guessing the market has finally acknowledged that inflation is here.
Target’s stock – yes, the chain of stores we all shop at – lost 24%. In a day. And pretty much for the week.
Walmart lost 19% for the week.
TJX – the parent of TJ Maxx and Marshalls – finished up a few dollars. When money gets tight, people shop at Marshalls.
Since many of the readers of this Report are business owners, this is just FYI stuff because there are a lot of interconnected reasons for why stocks do what they do. The stock you should be focused on is your company.
Part of your business plan is sitting down for a quiet hour (it’s a stretch, but stay with me) and thinking:
About what if a major supplier is lost
About what if interest rates go up
About what if sales drop 15%
So when one, or all, of these things happen, you turn to that page in your plan and do what you told yourself to do.
Voila, you no longer fear the unknown, because you have planned for it.
The R-Word: Two weeks ago…
…I speculated on the impact of a recession on the economy.
For many of us, our baseline for a recession is “The Great Recession”.
Housing crashed, commercial real estate value’s dropped and 10% of the workforce lost jobs.
Just before the Great Recession, there were 4.8 million job openings; there are 11.5 million openings now.
Just after the recession, there were 2.1 million job openings, a 2.7 million decrease, or 56%.
If the 11.5 million jobs declined 56%, that would leave 5 million job openings, more than we had BEFORE The Great Recession.
So many numbers; the main point is that if companies started tightening up, there’s a lot of cushion to absorb the pain.
I don’t think we’ll see the unemployment rates we had in 2009, but there will be a lot of movement in the job market.
The Cost of California
The U.S. Bureau of Economic Statistics – another agency – tracks the largest 382 metropolitan area in the United States.
In this particular ranking, the category was “Most Expensive Metropolitan Areas to Live”.
This includes 26 areas in California.
Of the 26 metropolitan areas in California, only 2 are not in the Top 100, meaning that 24 out of the 26 metro areas in California are in the top 100 most expensive cities to live in the United States.
Admittedly, it sounds more dramatic than it is, because really, how expensive is #100 compared to everyone else? It turns out, it’s about average.
On the other hand, when a quarter of the 100 most expensive metropolitan areas in the United States are in California, that is saying something.
It’s saying this state is very expensive. But as I like to say, everything is included.
What are the two cities that are NOT in the top 100?
Hanford and El Centro. They are at 101 and 193 respectively.
Hanford is 2.2% below the national average and El Centro is 6% below the national average.
It’s good to know that when you are talking to a potential worker about affordable towns, you can always point them in the direction of El Centro. At least the farmer’s market is really a farmer’s market.
Finally, Summer is here…
Monday is Memorial Day, traditionally the cultural start of summer in the USA.
It also marks the time of year where prospects put off all future sales appointments until September.
This is a federal holiday observed (not celebrated) on the last Monday of May. This date has been set since 1971.
I say “observed” because the whole point is to remember our military service men and women who have died during military service for the United States of America.
It is Veteran’s Day in November that we celebrate living service members, past and present, in case you are keeping track.
Many states and cities lay claim to starting it, but generally speaking, it started as Decoration Day in the 1860’s during the Civil War.
In 2000, Congress passed the National Moment of Remembrance Act. This asks all citizens to stop and remember these service members at 3:00 p.m. Or more appropriately, 1500 hours.
My ask this week is as follows:
Survey your employees this week and learn if any of them have family members that died in service to their country. Then thank them for their family’s sacrifice.
Whether you are grilling, swimming, driving or picnicking, please make a point of setting your phone to ping at 1500 hours. You can even ask Alexa, Siri or Google; they will be happy to track your activity.
Enjoy the weekend while remembering why we have it.
