The DJIA closed yesterday down -215-points while starting out the day up. As already written, the futures were up over 300-points before the market opened.
Today, the futures are up again, posting at this writing +225-points.
Housing starts are out this week and the St. Louis Fed predicts that they will be down along with new permits when compared to May, 2022, and June LY. With fixed 30-yr mortgage rates at a national average of 5.73%, no wonder the housing market is turning down.
With the The Fed bumping up rates another .75-1% housing will for all intents and purposes will take another dip monthly, through the end of the year. I remember back in 1985 mortgage rates were in the 12 to 14% range. I suspect we will see that again in 2023.
Thinking back to my old business days, knowing that a recession was coming, I would have already put a freeze on hiring. I would also have my department heads start to plan for layoffs.
The department heads would then rate all of the employees worth to their division and to the company as a whole. Once the employees work worth was rated A review of all the employees salaries would be reviewed.
Once you have the above information, the folks with higher than average wages and rate in the bottom half of the work worth review would be identified as layoff opportunities.
Last, I would reconvene a meeting of department heads to review the potential layoffs list to see if we could move any of those employees to rolls in other departments that they would be more successful at.
The final list of layoffs would go to HR and a pink slip day would be determined.
If you think this is not happening across American board rooms right now, you are kidding yourself.
My point, with the down turn of the economy eminent, layoffs will soon follow. Depending on how stable the company is, these layoffs will start in August and accelerate into late summer and fall. By the end of the year, we will see 7-10% U6 unemployment rates.
