Good morning, investors. I’ve loved meeting many of you at Bitcoin Investor Week in New York City these last few days. I’ll be back at the venue once again today — come say hi!
This morning, I’m focused on the hot-and-cold data coming out of the labor market.
No clear signal
The US labor market currently offers a compelling Rorschach test.
Bulls see a resilient economy, while bears see a structural hollowing out of corporate America.
Both outlooks are true at the same time.
On Wednesday, the Bureau of Labor Statistics reported that the economy added 130,000 jobs in January, more than double expectations and the strongest number since December 2024.
The unemployment rate dropped from 4.4% to 4.3%, too.
The US reported 130,000 non-farm payrolls added in January (Chart courtesy of Exhibit A)
But this “beat” was fueled in part by a seasonal quirk.
Retailers like Amazon and UPS hired fewer holiday workers than usual this season, and so had fewer employees to let go in January.
Meanwhile, this data comes just a week after a separate report from Challenger, Gray & Christmas found that companies cut 108,000 jobs in January, marking a 118% increase from a year ago and the worst start to a year since 2009.
Indeed, the labor market is showing signs of divergence.
In the “physical” economy, sectors like healthcare continue to expand and add jobs.
Yet in the “digital” economy, layoffs appear to be accelerating and companies are doubling-down on AI and efficiency.
AI is fueling this shift, according to Challenger. By their count, companies cited the new technology for 7% of the layoffs in January.
Unemployment fell in January to 4.3% (Chart courtesy of Exhibit A)
What’s more, hiring plans have fallen to the lowest level since the Great Recession, which doesn’t exactly square with the upbeat government data that hit markets on Wednesday.
How to respond to the data as an investor is a harder question.
These mixed signals — some bullish, some troubling — will likely remain gray for some time.
Market snapshot
Elsewhere
📊The US added 130,000 jobs in January. That’s more than double the consensus estimates for new payrolls. The unemployment rate edged lower to 4.3%, and healthcare jobs led the growth. (CNBC)
🐳 Bitcoin whales are on a buying spree. The crypto has drawn fresh support from some of its largest holders, who are capitalizing on the fire sale price drop to start the year. Wallets holding more than 1,000 bitcoin have added more than $4 billion worth in the last week. (Bloomberg)
💰 Bill Ackman is betting big on Meta. His firm Pershing Square revealed a sizable stake in the tech stock, which has dropped 16% over the last 12 months. The firm said it believes “concerns around META’s AI-related spending initiatives are underestimating the company’s long-term upside potential from AI.” (CNBC)
Rapid-fire
Siemens Energy stock surged 6% following a tripling of quarterly profits (CNBC)
Vertiv stock soared 20% after strong earnings guidance (Yahoo Finance)
McDonald’s earnings beat estimates and reinforced how customers are seeking value and budget options (CNBC)
Traders are pulling back bets on a March rate cut after the jobs data (Barron’s)
Healthcare is propping up the job market by an outsized proportion (WSJ)
David Einhorn of Greenlight Capital says the Fed will cut more than twice this year (CNBC)
The stocks to buy and sectors to watch for the 2026 bull run (Full Signal)
Robinhood stock tumbled double-digits after missing on revenue for the quarter (Yahoo Finance)
New AI tools force markets to pick winning sectors in real time (Opening Bell Daily)
Last thing
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