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TL;DR

  • Google has announced that they’ll be laying off 12,000 workers, following in the footsteps of Microsoft, Amazon, Salesforce and many other tech companies
  • The housing market has also continued to slide, with sales volumes dropping for the 11th month in a row
  • With the World Economic Forum being held in Davos, Switzerland this week, there is always a focus on a sustainable future. We’ve got investments that can help align your portfolio with these ideals
  • Top weekly and monthly trades

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Major events that could affect your portfolio

Workers in tech might have been hoping for a ‘new year, new job market’ kind of deal. If so, they’re going to be feeling pretty disappointed, because so far this year we’ve seen the second highest monthly figure of layoff announcements since late 2020.

A total of 52,135 workers have been laid off already in January, and there’s still 11 days left in the month.

Google, Microsoft, Amazon and Salesforce are the biggest companies to announce major layoffs, and because the companies are so big, even modest percentage reductions in head count result in a big number of cuts.

Google announced layoffs of 12,000 staff, Microsoft have reduced their headcount by 10,000, Amazon has added an additional 8,000 job losses to their originally 10,000 figure from late 2022 and Salesforce are showing 8,000 staff members the door.

A host of smaller companies including WeWork, Coinbase, Crypto.com and Carvana have all been forced to shrink the workforce. In many cases, the response to the share price has been positive. Profits have been under pressure through 2022, and with many senior executives stating that they overhired during the pandemic online boom, shareholders are happy to see a reduction in operating costs.

The challenge now will be to take the leaner approach into 2023 and turn the efficiency gains into improvements in the bottom line. Many leaders are now forecasting at least a mild recession to hit in 2023, which will further challenge companies across all sectors’ abilities to sustain profits.

In the real estate sector, things are also looking somewhat dicey. The existing home sales report for December was released Friday, falling for an 11th month in a row.

The final figure for the year was a seasonally adjusted, annualized rate of 4.02 million, which is 34% lower than the year before, and the slowest pace since November 2010. This was back when the fallout from the 2008 crisis was still in full effect.

Property has been dramatically impacted by rising interest rates. Mortgages are no significantly more expensive than they were 12 months ago, making it challenging for buyers to justify making purchases.

With that said, mortgage rates have come down since their high in October, but are still around twice as expensive as they were a year ago. Despite the record low transaction numbers, low inventory levels have meant that prices are holding up better than might be expected.

Despite coming down from its Summer peak, the average sale price in December still notched a 2.3% increase over the year before, at $366,900.

According to Danielle Hale, chief economist at Realtor.com, the US housing market is entering “nobody’s territory” as, “Evaporating demand has ended the strong sellers market of the past several years, and still-falling home sales tell us that many buyers are still not able to afford a purchase or not yet convinced that the market is tilted sufficiently in their favor to move forward.”

This week’s top theme from Q.ai

The World Economic Forum is on this week in Davos, Switzerland. The event is a networking and lobbying event for the world’s leaders and influential figures, with attendees including global heads of state, CEO’s, billionaires and activists such as Greta Thunberg.

One of the always hot topics at Davos is climate change (which is ironic given how many private jets are flown in for the week), and this year’s conference is no different.

With that in mind, our top theme for this week is clean technology. We’re likely to continue to see an intersection of economics and sustainable practices, and it’s events like Davos that help set the tone for this. Regardless of the private jet situation, the conversations had at these conferences help set the tone for company strategy the world over.

More and more, that strategy involves cleaner and more sustainable solutions.

Our Clean Tech Kit aims to take advantage of this trend. Now, to be clear, this is not a full ESG investment, but it does invest in a range of stocks and ETFs which offer diversified exposure to a range of companies in the space.

It includes investment in areas like renewable energy, smart grid technology, electric vehicles, lithium mining (for batteries), wastewater technologies and hydrogen fuel cell tech. Every week our AI analyzes three different ETFs in this space, predicts how they’re each likely to perform in the coming week on a risk-adjusted basis, and then automatically rebalances the Kit accordingly.

Top trade ideas

Here are some of the best ideas our AI systems are recommending for the next week and month.

The Greenbrier Companies (GBX) – The transportation manufacturing company is one of our Top Buys for next week with an B rating in Technicals and Low Momentum Volatility. Earnings per share are up 18.31% over the last 12 months.

Berkshire Hathaway (BRK.B) – Warren Buffet’s baby is our Top Short for next week with our AI rating them a F in Quality Value and a C in Technicals.

The Greenbrier Companies (GBX) – The transportation manufacturing company is also our Top Buy for next month with an B rating in Technicals and Low Momentum Volatility.

Fiesta Restaurant Group (FRGI) – The restaurant company is our Top Short for next month with our AI rating them a C in Low Momentum Volatility and Technicals. Earnings per share are down 172.09% over the last 12 months.

Our AI’s Top ETF trade for the next month is to invest in Chinese tech stocks, industrials and the world market as whole, and senior loans and US growth stocks. Top Buys are the Invesco China Technology ETF, the Vanguard Total Stock Market ETF and the Vanguard Industrials ETF. Top Shorts are the Invesco Senior Loan ETF and the First Trust US Equity Opportunities ETF.

Recently published Qbits

Want to learn more about investing or sharpen your existing knowledge? Qai publishes Qbits on our Learn Center, where you can define investing terms, unpack financial concepts and up your skill level.

Qbits are digestible, snackable investing content intended to break down complex concepts in plain English.

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