Notably, "reset" is the word Fed chair Jay Powell used back in June when talking about current pressures in the housing market. And as a report from Redfin published Thursday showed, those pressures continue to build apace.
Earlier this week, we argued the signal from corporate hiring announcements was not necessarily recessionary but certainly cautionary.
Basically, the world most management teams planned for in 2022 has not come to pass. And given the surprises facing businesses amid a rapid rise in interest rates, companies are just trying to adjust to the present rather than signaling something about the future with the recent spate of hiring and investment announcements.
A few weeks back, Yahoo Finance Editor-in-Chief Andy Serwer wrote that it seems just about everywhere you turn, we're asking if things will go back to the way they were in February 2020. And this is not just a business question: Harry Styles asks the same in his recent hit single.
Anywhere it seems you turn in the culture, there is uncertainty about the past's role to shape our coming present. In the end, the answer to these questions will most likely be an unsatisfying "maybe."
But as we continue to see slowdowns in the labor market, the housing market, and the stock market, it is worth remembering that we're still just working off the excess of a frenetic period in economic history.
Corporate earnings, announcements, mergers, layoffs, and the like are all so closely tracked by investors because of what they say about the future. Investing is, after all, about estimating the present value of discounted future cash flows — so don't tell me what you make, tell me what you're going to make.
Today's economic situation, however, asks investors and leaders to have a bit less foresight and a bit more gumption.
Act now so you make it to a tomorrow.
And let tomorrow's challenges be handled then. | 
No comments:
Post a Comment