Apple's plunge reveals spending capacity and investment trends

According to reports

Apple's Chinese supply chain manufacturer has received a notice from Apple requesting a reduction in the number of orders. There are many products involved: AirPods, Apple Watch, and MacBooks.
Understanding the present makes more sense than predicting the future.

For example, you need to understand that the current Hong Kong/China market is worth investing in;

Understand that energy is a sector that is losing momentum (crude oil returned to $80 at the end of the year after my last bearish trend, but fell rapidly to $74 in the new year);

Understand that America's high consumer price index is a thing of the past (the US consumer price index for December will be announced next week).

Apple's sharp drop is a matter of demand... Indeed, if cheap AirPods are also cut, then it is proof that US consumption is indeed weakening. In fact, Tesla's delivery problem is ultimately also a demand issue. There are growing signs that US consumption levels are weakening.

Consumption capacity is weakening
Judging from the composition of the CPI, if food prices do not fall and people's income decreases, then the first thing that should be reduced is consumption of electronic products.

When the pandemic hit, Americans used their savings to buy a ton of electronics from Best Buy, and now the cycle is completely reversed.

If you want to look at a macro indicator to understand the spending power of the American people, it is the level of savings.

The chart below shows the savings levels of Americans, which are currently even lower than they were in 2018.

to consumers and consumers. When it comes to business, two companies are suffering
A consumer company that manufactures and sells electronic products, video cards, streaming music, etc.It is in great danger. When people's savings dwindle, they stop consuming 3c products and cancel subscription services.Industries that exploded during the pandemic will now plummet.

If demand for TOC companies is suppressed, then it will affect TOB's business. Because up to Company B, they are making money from these companies. Sales news Orce's 10% layoff seems to be the result of this logic.

In the TOB industry, the most important thing is layoffs in the technology industry. The chart below shows layoffs in the tech industry since the pandemic (based on publicly available market data statistics), and these situations are still rising.

According to the Wall Street Journal, laid-off workers at these big tech companies will find jobs at smaller companies in a shorter period of time, so the unemployment rate in the US is still relatively low.

I'm sure many people will come to the conclusion that America will enter recession.I think it's possible, but it's hard to say how deep and how long it will take. The most important reason is that the US is a “consumer economy.”

America's GDP is based on consumption. So the key is whether the government is willing to spend money (this is a US Treasury deficit, not the Federal Reserve's temporary monetary policy). According to the US Treasury, the US federal government spent $6.27 trillion in fiscal year 2022, equivalent to 1/4 of GDP.As long as the new administration continues to spend money, even if America enters recession, it will not be a deep recession.

Chinese/Hong Kong stocks, good cash flow for US companies (games?) , defense stocks;
Invest wisely in

Consumer electronics and streaming music — wait for the macro trend to turn and then start to bottom out.