Good afternoon, ladies and gentlemen
Well… Trump didn’t exactly have the smoothest start to the day.
For the first time, Republicans failed to block a vote on his tariff policy. That means Congress now gets a say, first on Canada, possibly later on Mexico. On top of that, the Supreme Court may weigh in on whether parts of the emergency tariff setup are even constitutional.
Markets don’t like uncertainty. And right now, policy uncertainty is creeping back in.
At the same time, we’re staring at labor market data that could be… let’s say… uncomfortable.
Expectations for payrolls are modest. Around 60–70k. Some estimates even whisper zero. And the recent trend hasn’t exactly been strong: ADP weaker, jobless claims creeping higher, job openings falling, layoffs picking up. Hiring is close to post-pandemic lows.
Now add something structurally important: productivity is rising thanks to AI. That sounds great. It is great. But higher productivity often means fewer workers needed. And that’s not great for job creation.
Consumers are already showing stress. Credit card delinquencies above 90 days are the highest since the financial crisis. Student loan delinquencies rising. Young people finding it harder to land jobs. Retail sales, inflation-adjusted, basically flat.
So here’s the tricky part.
If we get weak jobs and inflation stays sticky, we start whispering the word nobody likes: stagflation.
That’s a nightmare for the Fed. Cut rates and risk inflation. Don’t cut and risk recession.
Markets right now are hoping for rate cuts. But there’s a difference between rate cuts because inflation is under control… and rate cuts because the economy is rolling over.
That distinction matters.
The dollar is already testing long-term support. USD/JPY has been falling sharply. If the Fed turns more dovish, the dollar likely weakens further. That could help multinationals — but it would also signal growth concerns.
And then there’s the bigger structural theme: AI.
This isn’t necessarily an AI bubble. But it might be an AI investment bubble. Big Tech used to generate insane margins with relatively light capital requirements. Now? Massive capex, data centers, chips, infrastructure — and the return profile is less certain.
$NVDA (NVIDIA Corporation) has heavy revenue concentration. Software companies are suddenly talking about disruption. $MSFT’s Copilot, despite being pre-installed, is losing share in some areas. Security architecture issues. Competition adapting fast.
AI will absolutely change the world. But it may also reduce hiring faster than it creates new jobs.
And that feeds back into consumption. Which feeds back into earnings.
Meanwhile, geopolitical risks are simmering again — Iran tensions, Taiwan rhetoric — nothing explosive yet, but enough to keep oil risk premium in the background.
So where does that leave us?
If payrolls disappoint, we could see a short-term relief rally on rate-cut hopes, especially in the $NSDQ100 . But if the market starts pricing a genuine growth scare, volatility increases quickly.
This is not a panic environment.
But it is a “be selective and don’t chase blindly” environment.
As you know, we’ve been positioned cautiously where needed and opportunistic where it makes sense. This is exactly why preparation matters. Volatility is not the enemy — unpreparedness is.
Let’s see what the data says. Then we react. Not before.
I wish you all a nice and profitable day ahead, and all the best
A
www.breakingthenews.net/Article/US-futures-flat-with-earnings-in-focus/65646367... Show More
Excellent points as we await the analysis... Show More
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