06.11.25 - Labor market divergence

US-based employers announced 153,074 job cuts in October, sharply up from 54,064 in September, according to Challenger, Gray & Christmas. This marks the wirst October for layoff announcements since 2003.
This comes just one day after the ADP employment report showed a better-than-expected gain of 42,000 jobs, marking the first positive month since July.

Some industries are now correcting after the pandemic-era hiring boom, while AI adoption, softening consumer and corporate spending, and rising costs are leading many firms to freeze or reduce hiring

Markets: nervousness persists across markets.

• Global stocks: rally is loosing steam

• Yields almost unchanged

• US dollar: drops

• Gold: back above USD 4’000/oz level

• Cryptos: negative trend continues - Bitcoin falls towards USD 100’000

• Volatility: VIX Index up

My View: We get some labor market data even with the shutdown, the longest one in history. The data is published by private institutions.
The divergence could be the sign of a late-cycle labor market.
While ADP reflects current payroll strength, the Challenger report signals forward-looking caution — companies are preparing for slower growth or weaker demand ahead.
Such mixed signals are typical before a turning point: employment still resilient on paper, yet corporate sentiment turning defensive.

Markets remain on edge, as illustrated by Tuesday’s panic followed by yesterday’s relief rally.
After investors fled from AI-related stocks on warnings of high valuations and sings of a bubble, sentiment quickly reversed — the familiar “buy the dip” reflex returned.
The question now is whether this remains a profitable strategy, or if investors are simply ignoring the growing late-cycle risks.

Become a member to access more valuable market updates like this