Bad Jobs News Is Apparently Good Stocks News Now

The labor market is circling the drain. Small businesses have collectively chainsaw'd 46,000 jobs in the last month alone—companies with 1 to 19 employees are acting like they're preparing for a depression. Mid-market firms? Also cutting. We're on pace to cross the 1 million layoffs threshold for the year by Friday. But here's where it gets weird: the S&P 500 nudged up 0.3% on Wednesday. Nasdaq gained 0.2%. The Dow was basically flat. The market was... fine with it.

This is what late-cycle desperation looks like, folks.

The CME FedWatch tool now shows an 89% probability the Fed will cut rates by a quarter point at next Wednesday's meeting. Up from 50% just a few weeks ago. One ADP report showing private payrolls dropped 32,000—when economists expected a gain of 40,000—and suddenly the entire calculus flips. Wall Street doesn't want a healthy labor market anymore. It wants weakness. It needs it. Because weakness is the only ticket left to lower rates, and lower rates are apparently the only thing keeping this market from recognizing that valuations have transcended into the territory of performance art.

Treasury yields climbed despite the bad news because markets are now internally consistent about one thing: the Fed is coming. The 10-year rose to 4.102%, the 2-year to 3.523%. Bond traders aren't even pretending to be surprised. They're just pricing in the inevitable.

The Divide

Here's the real kicker: the Federal Reserve itself is a mess. Bank of America economists are calling it "the most divided committee in recent memory." You've got Trump appointee Stephen Miran cheerleading for a half-point cut—because apparently the White House still thinks the Fed runs like a quarterly earnings call. You've got other members pushing for a hold. And then the moderate majority, probably led by Powell, will settle on a quarter point and try to sound hawkish during the press conference, knowing full well that hawkish rhetoric doesn't stop the Fed from cutting. It never does.

Powell attempted it in July. Again in October. The market acknowledged the toughness, shrugged, and kept betting on rate cuts anyway. This time, when Powell inevitably talks about watching inflation and taking it seriously, we're all just going to nod politely and wait for the next FOMC meeting, where we'll do this again.

Crypto: The Rebound That Nobody Asked For

Bitcoin climbed back above $93,000 by Thursday, having recovered from a nightmarish dip below $84,000 early in the week. The psychology of the bounce is worth examining. In the lead-up to the collapse, there was talk of MSCI potentially removing crypto-heavy companies from major indices. Thin liquidity combined with macroeconomic fears (the yen volatility scare out of Japan didn't help) and you got a cascade. Classic.

But then Vanguard announced it would let clients access crypto ETFs. Bank of America greenlit wealth managers to suggest up to 4% Bitcoin allocations. The institutions—those bastions of stability—are basically saying they're comfortable now. That's either very smart or comically late. Probably both.

Ethereum rallied 4.6% and is now trading near $3,194. Whale wallets holding between 1,000 and 10,000 ETH accumulated roughly 450,000 ETH between mid-November and early December. That's the kind of structural accumulation that either precedes a moonshot or represents the peak of someone's hubris. On-chain data never really tells you which one it is until weeks later.

XRP is another story—the new spot ETFs have been a steamroller, pulling in $756 million in inflows while Bitcoin and Ethereum ETFs are seeing comparatively modest inflows or even outflows (Ethereum saw $79 million in net outflows on one day). Yet XRP itself is down 8% on the week and dipped below $2. The usual crypto paradox: the ecosystem is strong but the asset is weak. Or maybe it means nothing and we're all just pattern-matching after the fact.

The Amazon-USPS Weirdness

Amazon is in "discussions" with the U.S. Postal Service about the future of their relationship. This is the corporate equivalent of saying "we're taking a break." Translation: new Postmaster General David Steiner is planning a reverse auction in early 2026 where USPS could open up Amazon's slice of facilities to competitors.

Amazon generates over $6 billion in annual revenue for USPS—about 7.5% of their total. So this is meaningful. Not existential, but meaningful. The Trump administration is doing what the Trump administration does: turning contracts into competitions and using logistical leverage as a tool. Amazon has to consider other options. UPS has to be considering whether this is their moment. FedEx is probably running spreadsheets.

Nothing happens immediately, but in the final six weeks of a year when logistics costs spike and the holiday season is make-or-break, this kind of uncertainty is genuinely corrosive to planning.

The Energy Picture Nobody's Talking About

Natural gas futures hit $5.046 per million BTUs on Thursday—the highest level since December 2022. Cold weather in the Midwest and East Coast is real, and fourth-quarter natgas is up nearly 50% quarter-over-quarter. Year-to-date, it's climbed 36% after a 45% surge in 2024.

This matters for energy stocks (the First Trust Natural Gas ETF is up nearly 7% this quarter) and for anyone with exposure to commodity-sensitive companies. It also matters for inflation expectations. A spike in energy costs heading into winter when the Fed is supposedly cutting rates is the kind of contradiction that becomes headline news if it persists.

What Actually Matters Next

Tomorrow and Friday bring delayed September data on consumer spending and the PCE index—the Fed's favorite inflation gauge. University of Michigan consumer sentiment drops on Friday too. If PCE comes in hot, the entire 89% conviction about a December cut gets tested. Not broken, but tested.

But realistically? After this week's job data, the Fed is locked in. Barring a total economic surprise, we're getting a cut. The only question is whether Powell can sound concerned while it happens, and whether the market believes him.

Spoiler alert: it won't.