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Judgment Day

The US job market is guilty until proven innocent

A pick-up in layoffs coupled with a low hiring rate is pointing to increased vulnerabilities for the American worker.

Luke Kawa

The US job market isn’t terrible. But it’s vulnerable.

That’s the key message from the July Job Openings and Labor Turnover Survey released on Wednesday morning – a report which reinforces the idea that the momentum in the labor market continues to weaken, raising the stakes for August’s non-farm payrolls report on Friday.

Of note: the number of job openings tumbled, and the number of Americans involuntarily removed from their job, to use a euphemism, spiked.

In the minutes following the release, traders briefly priced a 50 basis point cut as the most likely outcome for September’s Federal Reserve meeting. 

What’s interesting is that despite this jump in layoffs, the private sector firing rate (that is, layoffs and discharges as a share of private sector workers) is still extremely low versus history.

But that contrasts with a private sector hiring rate that’s quite subdued, and suggests the unemployment rate could be materially higher than it is now.

Guy Berger, director of economic research at the Burning Glass Institute, has termed this odd combination of hiring rates and firing rates sending different signals (along with a quits rate that’s fairly low!)  “The Great Stay.” Conor Sen, the founder of Peachtree Creek Investments, suggested a slightly more inauspicious name given the overall slowing in labor market conditions: “The Great Stall.”

This invites the question: what should we care about more? Low firing or low hiring?

“A decline in hiring activity is historically as damaging to workers as layoffs, and deserves to be taken seriously,” wrote Preston Mui, senior economist at Employ America, before the underwhelming July jobs report even came out. Mui flagged that the downturn in hiring preceded the increase in firing during the Great Recession.

This makes some intuitive sense: absent major shocks, we’d expect conditions at a company to move from good (sales up a lot, hiring up), to less good (demand growth slowing, hiring down), to bad (demand down, firing up) – not skipping the middle step. 

So to summarize: job growth is slowing, the unemployment rate is rising, and layoffs have ticked up (at least according to the JOLTS report). 

The labor market needs a boost from somewhere to reduce this vulnerability; to keep the “less good” state of affairs from turning into a “bad” one. And it needs this help... [stares in the direction of 2051 Constitution Ave., the address of the Marriner S. Eccles Federal Reserve Board Building]... yesterday.

Note: Why do we care about July data on the labor market when we already got the non-farm payrolls report for that month?!? With the August jobs report data a couple of days away? Well, the non-farm payrolls report is based on surveys performed in the middle of the month, while the JOLTS report includes data at month-end, so what we got today is a little more current (and granular).

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J. Edward Moreno

FDA says it will take “decisive steps” against GLP-1 compounders, HHS refers Hims to DOJ for investigation

The Food and Drug Administration said it would take "decisive steps" to restrict GLP-1 compounding, a day after Hims & Hers announced that it would sell copies ofNovo Nordisk’sWegovy pill.

The FDA specifically called out Hims in the announcement. Additionally, Department of Health and Human Services' General Counsel Mike Stuart said in a post on X on Friday he has referred Hims to the Department of Justice "for investigation for potential violations by Hims of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions."

In a statement, Hims said the company "has always operated with a deep commitment to the safety and best interests of consumers and in compliance with applicable law."

"We have a long history of successfully working with regulators, and look forward to continuing to engage with the FDA to ensure safe access to affordable healthcare," they said.

This marks a significant shift in tone from the FDA, which has done little to prevent companies like Hims from marketing copies of Novo's lucrative weight loss drugs.

Shares of Hims fell 14% after hours. The stock had already taken a hit after FDA Commissioner Marty Makary said in an X post on Thursday that the agency would “take swift action against companies mass-marketing illegal copycat drugs.”

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Hims, long flying under regulators’ radar, finally strikes a nerve with its Wegovy pill copy

Hims, long flying under regulators’ radar, finally strikes a nerve with its Wegovy pill copy

The FDA specifically called out Hims in the announcement. Additionally, Department of Health and Human Services' General Counsel Mike Stuart said in a post on X on Friday he has referred Hims to the Department of Justice "for investigation for potential violations by Hims of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions."

In a statement, Hims said the company "has always operated with a deep commitment to the safety and best interests of consumers and in compliance with applicable law."

"We have a long history of successfully working with regulators, and look forward to continuing to engage with the FDA to ensure safe access to affordable healthcare," they said.

This marks a significant shift in tone from the FDA, which has done little to prevent companies like Hims from marketing copies of Novo's lucrative weight loss drugs.

Shares of Hims fell 14% after hours. The stock had already taken a hit after FDA Commissioner Marty Makary said in an X post on Thursday that the agency would “take swift action against companies mass-marketing illegal copycat drugs.”

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Tasha Matsumoto
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Tech rebound propels stocks to best day since May

The S&P 500, Nasdaq 100, and Russell 2000 all climbed higher as the AI trade was back on.

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Airlines rise, continuing their volatile 2026, as US-Iran talks may foreshadow some oil supply relief

Airline stocks are surging on Friday, as the market appears to be pricing in some medium-term oil pricing relief following talks between the US and Iran. Iranian officials referred to the meeting as “a good beginning.”

Shares of budget carriers, which have tighter margins and are more sensitive to fluctuations in fuel costs, are leading the surge. Frontier Airlines and Allegiant up more than 13%, while major airlines like United Airlines, American Airlines, and Delta Air Lines are also up at least 6%. JetBlue and Alaska Air are similarly up about 6%.

The market more broadly is rebounding on Friday, with the S&P 500 up 1.6% and bitcoin recovering some of this week’s losses.

Airlines have been volatile to start 2026 amid geopolitical tensions, varying annual forecasts, and the impact of winter storms.

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Luke Kawa

The AI supply chain is soaring thanks to Amazon’s capex budget

If tech companies are going to spend way more than expected on capex, well, that means other companies are poised to benefit from that massive spending spree.

Amazon’s plan for $200 billion in business investment this year was the exclamation point to end a reporting period that saw every Magnificent 7 hyperscaler that provides guidance offer a 2026 capex budget well above what Wall Street had anticipated.

Here’s a look at the different parts of the supply chain that are soaring on the persistent demand for, and seeming scarcity of, AI compute:

Big Tech capital expenditure soared in 2025. It’s going up another 50% in 2026.

Big Tech capital expenditure soared in 2025. It’s going up another 50% in 2026.

Here’s a look at the different parts of the supply chain that are soaring on the persistent demand for, and seeming scarcity of, AI compute:

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Matt Phillips

For memory chips, the “parabolic price hike” is continuing to ramp higher

The remarkable run-up in prices for memory chips continued into early February, analysts at Bernstein Research say, driven largely by data center demand from hyperscalers and cloud service providers (CSP).

Prices for NAND flash memory wafers — a type of memory used in devices, as it retains data even when powered down — soared 35% between the end of 2025 and February 2.

Spot prices for DRAM — ubiquitous short-term data storage chips — jumped about 28% in that period. But that massively understates the remarkable shift in pricing for what were long seen as commodity tech hardware inputs. DRAM prices are more than 2,000% over the last year, while NAND prices are up more than 600% in that period.

The ongoing momentum provides still more support for memory chip plays like Micron and Sandisk, which have been big market winners in recent months.

In a note published earlier this week, Bernstein Research analysts wrote:

“The parabolic price hike continued in Jan. Indicated price increase for 1QCY26 is much stronger than we expected and we hence see upside to our near term memory pricing projection. Unrelenting CSP demand remained the main driver. PC and Mobile demand hasn’t been destroyed yet because of lean inventory & pull-forward purchase. Going forward price hike is expected to continue but likely at a slower rate, as PC and Mobile demand should contract meaningfully this year. Price however may stay elevated throughout this year, supported by CSP demand.”

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