May 4, 2022, 11:08 am EDT
What Will Happen Next?
There is an important skill for market participants to look ahead and think about the next possible outcome after certain events. For example, we could ask ourselves the question: “ What will happen next?” after Lyft Inc (LYFT) tumbled down -34% this morning after the earnings report.
Its counterpart Uber Technologies Inc (UBER) also lost -11% as of now. However, we do not know what will happen to UBER after its earnings are reported after the market close today.
China’s version of UBER / LYFT is called Didi Global Inc (DIDI) was IPO-listed last summer at $17 but now is under $2 dollar. It lost nearly -90% of its value in less than a year.
We can see many once-popular well-known businesses are in big trouble in terms of their stock performance like NFLX, SNAP, COIN, HOOD, etc.
There could be two things to happen in our opinion:
- Layoff / Shrinking Size
- The decline in housing/rental markets
Laying off employees after the earring disaster is a common practice. We expect job markets will begin to shrink in the next 3 to 6 months. It means the topping out of job markets and a turning point for unemployment rates.
Since both LYFT and UBER are located in San Francisco, we expect the housing markets will begin to see a decline from today’s level. Again, this is another topping out or turning point for the housing market. Due to the left of high-paid workers, both the housing market and rental markets are likely to go down together in the technology-focus cities. This trend could apply to other cities like Seattle, New York, Boston, Austin, etc.
This is our observation and prediction. We will let the time justify the results.