There have now been 1.2 MILLION job cuts announced in 2025. And, 60% of Americans say we are in a recession.
Yet, the S&P 500 has added +$17 TRILLION since April, nearing its 29th record high of 2025.
What's happening? Let me explain.
US layoffs currently set to match levels seen in the 2008 Financial Crisis.
US employers have announced 1,170,821 job cuts in 2025, the 2nd-highest total in 16 years.
In November, US employers announced 71,321 job cuts.
This is the 3rd HIGHEST monthly total ever recorded.
And, it's impacting ALL demographics.
Unemployed Americans with 4-year college degrees now make up a record 25.3% of total unemployment.
The percentage has doubled since the 2008 Crisis and is above 2020 levels.
The US labor market is weakening across all education levels.
This explains why surveys show that the MAJORITY of Americans think we are in a recession.
68% of those surveyed say inflation and rising cost of living tops the list of reasons why they believe we are in a recession.
50% say family members are complaining about money.
However, the data says otherwise.
There is currently just a 33% chance that the US economy enters a recession by 2027, per Polymarket.
Odds are down ~11% percentage points since October 2025 and at their lowest level yet.
The data says we are NOT in or near a recession.
Meanwhile, the S&P 500 is seeing one of its best runs in history.
The market just posted its 6th 35%+ rally in 6 months over the last 30+ years.
While Wall Street sees historic gains, most Americans think the stock market is DOWN.
So, why is there such a massive disconnect?
Data shows that US GDP grew by +3.8% YoY in Q2 2025, and +1.6% in the first half of 2025, far above contractionary territory.
However, ~63% of that growth came from AI-related spending.
In other words, without AI spending, the economy is running FAR weaker than it seems.
This chart says it all.
Spending on data centers in the US has TRIPLED since the release of ChatGPT in November 2022.
Spending on structures excluding data centers is down ~20% since the 2023 high.
The strength of technology companies has created 2 "economies" in the US.
This is why we see another Fed rate cut this week, their 3rd cut of 2025.
American consumers are struggling from a rapidly declining labor market.
Yet, the largest US companies are thriving as AI explodes, and rate cuts will add fuel to the fire.
All as inflation runs at 3%+.
We see more record highs ahead for the S&P 500.
Why? Because the biggest companies don't need rate cuts, but consumers do and they are coming.
The top 10% of US stocks now account for a record 76% of the US market.
These stocks will push the S&P 500 to 7000+ in our view.
The AI Revolution is transforming just about ALL parts of financial markets.
The macroeconomy is shifting and stocks, commodities, bonds, and crypto are investable.
As rate cuts continue into stagflation, we see more nominal appreciation in assets across the board.
The only way to hedge against the broadening wealth gap is to own assets.
Own assets or be left behind.
source: Ko beissi Letter
