1,114 words, 6 minutes read time
Today, I’ll keep it short.
As usual, let’s start with the conclusion: On the horizon of the U.S. economy, a superstorm is quietly forming!
What’s going on?
First, let’s look at two recent pieces of news:
One piece of news just came out today. After announcing poor quarterly results, HP, the world’s second-largest PC manufacturer, suddenly announced that it would increase layoffs by 1,000 to 2,000 people!
How is HP’s performance?
Its first quarter financial report for the fiscal year 2025, ending January 31, shows that revenue increased by 2.4% year-on-year to $13.5 billion. However, its net profit was only $565 million, a year-on-year decrease of 9.16%.
The only bright spot is that its sales increased by 10%, slightly more than the analysts’ average estimate of $13.4 billion.
So why is HP suddenly laying off employees?
Although HP’s financial report sounds calm, if you read it carefully, you can sense a bleak atmosphere: it says that our profit prospects are lower than expected due to rising component costs and the impact of tariffs on Chinese goods!
Who is responsible? It’s obvious: Trump!
He was almost directly named!
HP’s CEO added another blow: By the end of this fiscal year, less than 10% of products sold in North America will come from mainland China.
But is that all? No!
Because this layoff by HP is an “additional layoff.” It had already initiated a cost-cutting plan in November 2022, planning to gradually lay off 7,000 people, and now it’s adding another 2,000!
What can we see from this?
As a relatively old-tech company, HP is actually having a tough time!
Now, let’s talk about another piece of news, also from a well-known U.S. tech company called Autodesk. It is a design software manufacturer that announced a few days ago that it would lay off 1,350 people, accounting for 9% of its total workforce.
Why is this company laying off employees?
Autodesk’s CEO, Andrew Anagnost, explained in a memo to employees that the layoffs are to maintain competitiveness in the current economic climate and “to protect the company’s leadership position in cloud computing and artificial intelligence.”
But the funny thing is: Just last Thursday, the company announced its fourth-quarter earnings, which were better than expected: adjusted earnings per share were $2.29, revenue was $1.64 billion, a year-on-year increase of 12%, compared to the market’s estimate of $2.14 per share and $1.63 billion in revenue.
Just like HP, it was slightly better!
After reading this, do you feel a bit strange?
First, the financial reports are better than analysts’ estimates!
Second, although they are better, they are only slightly better!
Third, after releasing not-so-bad financial reports, both companies suddenly announced layoffs!
What’s going on?
Actually, those who have worked on financial reports know: there is a lot of room for adjustment!
Just like some stocks in the past, after being continuously ST, in order to avoid delisting, they would sell a few houses at the right time, and then the company’s performance would turn from a loss to a profit!
This kind of thing, of course, has a big impact on the market!
So during this period, many U.S. media feel that although it only involves two companies, for the U.S. economy, this is a negative shock that can be observed from the details!
Now, let’s talk about the third piece of news: More and more institutions and analysts are predicting that the U.S. first-quarter GDP may shrink by 1.5%. Although printed dollars are still flooding the market, creating the illusion of economic growth, it will be difficult to maintain this illusion in the future!
Moreover, more and more investors believe that this phenomenon is likely not a short-term one, and they are preparing to short the dollar!
What does this mean?
The warning signals of a big storm have appeared!
Now, let’s delve deeper into why this is happening.
You should remember a rule I mentioned before: Every time the Federal Reserve enters a rate-cutting cycle, the U.S. falls into a crisis!
For example, in January 2001, the Federal Reserve cut interest rates.
Soon, the Nasdaq began to plummet, and by December 2001, it had been halved twice, and the internet bubble was completely burst. The crisis lasted for about two years.
For example, in September 2007, the Federal Reserve cut interest rates.
What happened next? The U.S. soon experienced a global financial tsunami!
In November 2007, U.S. stocks began to fall, and by March 2009, they hit bottom. This crisis lasted for two years.
The next rate cut is happening now, starting last September.
What will happen this time?
Because in the previous two times, the U.S. still had some advantages in technology and military, so it could survive the crisis. But this time, the U.S. AI bubble is too big, and it has encountered Deepseek. Plus, the U.S. has been printing money for more than a decade. Many people believe that this storm will be much more severe than before!
So, according to the previous pattern, how severe will the crisis in the U.S. be this time?
Now, there are already some signs.
During this period, more and more Americans feel that they were deceived by Trump when they voted. So, due to concerns about the U.S. economy, recent polls show that Trump’s approval rating is declining, and his disapproval rating is rising sharply!
Now, 51% of people do not approve of Trump’s performance;
Only 44% of people approve!
In comparison, on January 20, when Trump first took office, his disapproval rate was only 41%, and it increased by 10% in one month!
Another thing worth mentioning: After “quarreling” with Zelensky, Vance took his family skiing and ran into trouble!
Vance originally planned to take his family skiing in Vermont, but encountered hundreds of people waiting for him, very excitedly calling him a “traitor.”
What happened next?
Because there are only a few hotels at the ski resort, those people also went to the entrances of various hotels to wait. It is said that Vance had already booked a local star-rated hotel, but seeing the situation, he immediately decided not to stay and took his family to an unknown place to stay!
Okay, now we can summarize: At the micro level, some warning signs of the U.S. economy have gradually emerged from the horizon. We still need to be careful and vigilant!
Why is the U.S. now so submissive to Russians?
Why does it sometimes act crazy, saying it will impose tariffs on China, and sometimes spread false news, saying it will negotiate with China?
These emerging warning signs may not be unrelated!
A breeze starts from the tip of the grass!
Recently, be careful!
