Good morning, investors. Not only are asset prices falling like a fire sale but the economic data has taken a bleak turn.
Compared to just a couple months ago, it’s suddenly feeling more contrarian to be optimistic.
Jobless economics
January was not a good month for the US labor market.
US employers announced over 108,000 job cuts in the first month of the year, according to data from Challenger, Gray & Christmas released Thursday.
That marks a 118% increase from a year ago and the worst January since 2009, when the economy was in the depths of a financial crisis.
While the rise of AI has fueled a narrative of narrow, tech-specific layoffs, the latest data suggest a much broader slowdown.
The Challenger data showed companies cited AI for about 7% of total layoffs in January.
That comes after companies referenced AI for 54,836 layoffs in 2025.
Other data reinforce the uncertain outlook.
First, the Bureau of Labor Statistics’ JOLTS report for December showed job openings fell for the third month in a row to 6.5 million, the lowest level in more than six years.
That tracks the sluggish job growth data of the last 12 months, which marked the weakest non-recession year for jobs in two decades.
Job growth has slowed since 2024 (Chart courtesy of Exhibit A)
Indeed, the gap that once defined the “worker-friendly” labor market of the pandemic has vanished:
In 2022, there were two jobs per unemployed person but now it’s close to a one-to-one ratio
Second, the government also reported that initial jobless claims rose to 231,000 last week, the highest mark in two months.
While it’s possible winter storms have distorted the numbers, the trend has been moving in a troubling direction for most of the last year.
Hiring intentions, meanwhile, have also turned lower.
The same Challenger report said employers announced 5,306 hiring plans, the lowest total for the month since the data series began in 2009.
Taken together and the message suggests corporate America has moved beyond trimming headcount at the margins or experimenting with AI-driven efficiencies.
Companies have embraced cost-cutting while pulling back on hiring — a combination that historically has signaled a transition from a growing labor market to a shrinking one.
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Market snapshot
Elsewhere
📦Amazon fell double-digits after earnings miss. The company posted mixed fourth-quarter results and raised its spending forecast for the year to an eye-watering $200 billion. (CNBC)
📉 Alphabet stock tumbled 3.1% after beating earnings. The mega-cap stock announced that its 2026 capital expenditures would surge as high as $185 billion, far above Wall Street’s expectations for $120 billion. (Yahoo Finance)
🪙 Bitcoin has declined to pre-election levels. The crypto traded near $64,000 on Thursday, more than 45% lower than the all-time high reached last year. It has now erased all of its gains made during President Trump’s second term. (Investopedia)
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Interview
I sat down with Michael Gayed of the Lead-Lag Report to unpack the Japan carry trade, why he thinks it’s the biggest risk to investors this year, how to position for extreme tail-risk events, and how currency market volatility could undercut the AI trade.
Tune in on YouTube, Spotify, or Apple Podcasts.
Rapid-fire
Qualcomm stock dropped double-digits after it warned of a broad memory shortage (CNBC)
SpaceX is seeking early stock index entry ahead of its massive IPO (WSJ)
Silver prices fell double-digits again Thursday, retreating more than a third since its all-time high a week ago (Bloomberg)
Executives and insiders buying their own stock typically works in the near-term before weaning off, new data shows (WSJ)
OpenAI debuted Frontier platform for AI agents, another threat to legacy software (Yahoo Finance)
This little-known tiny stock could triple this year as it transforms retail shopping (Best Ideas Club)
The AI boom has decimated software stocks (Opening Bell Daily)
On this day
🗓 February 6, 1935: The board game “Monopoly” first went on sale and went on to become one of the most popular pastimes of all time.
Last thing
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