The most awaited recession in the world is here, already over, and coming soon simultaneously.
Just like Schrödinger’s cat, analysts can’t put the pulse on the current recession. And rightfully so.
- While the largest layoffs occurred in Q4 of 2022 and Q1 this year, Layoffs.fyi still reports the highest number of layoffs since May last year. Microsoft reduced its sales headcount, Crunchbase announced layoffs, VCs shut down entire divisions for larger funds, and certain segments are shrinking.
- Larger valuations are diminishing, too. VCs with remaining budgets are still focusing on smaller deals and seed rounds instead of Series B and later – because of bloated valuations in late 2020 to early 2022.
- Amazon Prime, however, flagged the biggest Prime Day event for Amazon, ever. It generated $12.7 billion in sales over 48 hours, with 375M items purchased – about 70 million more than last year. Shopping seems to be as strong as it gets!
- The Consumer Price Index showed that annual inflation in the US slowed from 4% to 3% in June, the lowest since March of 2021.
- Mortgage rates passed 7% in November after a 2.96% average for 2021. This rate is going strong over 6.5% since, holding steady and not dropping anytime soon due to the Fed’s policy.
- Employment is still strong. The unemployment rate is low, and job opportunities are still available, even though they are growing more slowly than usual.
- S&P is growing confidently – with Bitcoin too passing $30K once again due to confidence in the US not defaulting with debt ceiling rising.
Why does that matter?
Signals of high inflation rates, fewer jobs, layoffs indicate a trouble. But large shopping expenditures, lower unemployment rates, low inflation reports appear like business as usual – if not better in most cases.
Predicting business trends and growth charts is uncertain. Businesses withhold decisions in the meantime, cut budgets for R&D and risky projects, and wait for the storm to pass.
And resorting to AI again… ChatGPT’s traffic went down while Bart entered Europe. Musk introduced xAI as an alternative chat bot, increasing the AI domination of the space.
But with more alternatives, AI now seems like a commodity. Browsing habits calibrate – and Google starts to see more organic traffic once again.
Trends we saw clearly appearing in Nov-Jan as irreversible no longer are. And even in the slow summer season, we see older habits restoring to action.
My prediction is for a stronger Q4 season and a slowdown in Jan-Feb – and probably, getting this over with and back to business growth after.
What do you bet on?
Yours,
Mario
My Take
✍️ LinkedIn Filtered notifications – Linkedin released a huge win of a feature – filtered notifications for creators. The changes made follow basic steps, that allow creators to thrive like seamless UX, timely notifications, and diverse experiences. The update mainly affects the user experience part and it allows creators to have a cleaner, more robust notification dashboard.
✍️ The Google Takeover Framework – Mihael Cacic, the “digital marketing mad scientist” as Sujan Patel calls him, explains his Google Takeover framework and how he approaches competitor research and keyword competition.
Business Strategy
📝 France vs UK for Europe’s AI Crown – France is investing heavily ($560 million) in AI research and startups, while the UK aims to become a science and technology superpower, but there are differences in their regulatory approaches.
📝 US funds limits on tech stocks – US investment funds, including major asset managers like Fidelity and BlackRock, are being restricted from buying more shares in popular stocks due to diversification rules, as these funds struggle to keep up with indices that are increasingly dominated by a few large technology companies.
📝 Norway ban on behavioral advertising – The Norwegian Data Protection Authority (DPA) has temporarily banned behavioral advertising on Facebook and Instagram following a ruling by the CJEU that deemed Meta/Facebook’s GDPR approach largely illegal, with potential non-compliance resulting in fines.
📝 EU probes Microsoft over Teams – The European Commission will open a formal investigation into Microsoft over allegations of unfair bundling of its Teams videoconferencing app with its Office software, potentially leading to formal charges in the autumn.
📝 Activision Acquisition deal extension – Microsoft is in talks to extend its acquisition contract with Activision Blizzard, which is set to expire on Tuesday, to overcome remaining regulatory hurdles for their $69 billion deal, and the extension would allow more time to find a regulatory solution in Britain, the only major jurisdiction blocking the deal.
📝 Enter Claude 2 – Anthropic has released Claude 2, an improved model with better performance, longer responses, an API, and a new public-facing beta website, claude.ai, as well as enhancements in coding, math, and reasoning abilities, and increased safety measures; it is now available for use in the US and UK.
Global News
Binance took another layoff hit, this time with 1000 employees. Other than that, pretty minor layoff week:
- 2023 Companies with layoffs: 873
- Employees were laid off in 2023: 219,962
📈 Interesting week, as Dow Jones takes a +1,000 hike, unlike NASDAQ and S&P 500, which remain mostly untouched.
- DOW: 34,951 (+1.05%)
- NASDAQ: 14,353 (+0.76%)
- S&P: 4,554 (+0.71%)
📈 Let’s have a look at Fidelity’s 2023 statistics in light of the new tech investing limitations in the US:
- Fidelity total administration assets: $11.1 trillion
- Fidelity total discretionary assets: $4.2 trillion
- Total Retail Accounts: 38.2 million
📰 What an eventful week. Former President Trump takes the East Coast by storm with his January 6th investigations, while the West Coast saw an actor strike and a continuation of a 25-year-old case regarding the murder of the legendary Tupac Shakur.
- LA police served a search warrant related to the murder of Tupac Shakur.
- Former President Donald Trump has been notified that he is the target of an investigation regarding the January 6th riots attempting to overturn the 2020 election.
- Thousands of Hollywood actors go on strike after contract negotiations fail, a move that can halt many productions.
Investing Updates
With SeedBlink partnering up with Equidam, both platforms significantly help strengthen the connection between founders and investors when it comes to valuations. So let’s see what’s happening this week:
- Finqware – Raises €3M to automate corporate financial operations in Europe.
- Cycle– If you’re interested in collaboration in product development, Cucle is raising €2.75M to boost their project.
- SmartNanotubes-Raising €1M for gas detector chips and bringing them into larger markets.
Note: Got a round going that you want to feature – your own business or a portfolio company? Get in touch.
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