One Strong Sign of a Weak Labor Market

Markets are taking a fresh run at new all-time highs today. But beneath the surface of blowout earnings from big tech companies, the real economy is grappling with job growth.

The automatic reason given is “of course, AI is replacing jobs.” Not so fast.

One sign the real economy is struggling outside the tech sector? Declining truck sales, often a leading indicator of higher unemployment:

Turn Your Images On

Truck sales are declining at a rate usually consistent with an economy in recession. (Source: Global Markets Investor)

AI tools are incredibly useful and AI stocks remain richly valued. Yes.

New tech will also create new, productive and higher paying jobs. Ones we haven’t even dreamed up yet.

In the meantime, the jobs market is being measured by the tools needed to calculate the economy without knowing what the new jobs will be.

The lack of new entry-level jobs in the economy will be profundly shocking for the labor market for decades to come. Just as it always in the face of rapid new tech innovation.

~ Addison

P.S. “If it ain’t broke,” is how Andrew Packer kicked off the review of the Grey Swan Model Portfolio on Friday. The high market valuation was only part of the conversation during our quarterly review. Catch the replay in the members section of the Grey Swan website.

Precious metals also figured prominently during the review with a 10-sigma move in silver, which tanked 32%. Peak-to-trough, gold also fell 9%, under $5,000.

Markets appear concerned about Kevin Warsh, President Trump’s pick for the next Fed Chair. Warsh is a sound money advocate who would like to see the central bank’s balance sheet reduced. A great goal, but it would also require a more austere fiscal policy.

We’ll have updates on this week’s Grey Swan Live! shortly. Stay tuned!

Markets are taking a fresh run at new all-time highs today. But beneath the surface of blowout earnings from big tech companies, the real economy is grappling with job growth.

The automatic reason given is “of course, AI is replacing jobs.” Not so fast.

One sign the real economy is struggling outside the tech sector? Declining truck sales, often a leading indicator of higher unemployment:

Turn Your Images On

Truck sales are declining at a rate usually consistent with an economy in recession. (Source: Global Markets Investor)

AI tools are incredibly useful and AI stocks remain richly valued. Yes.

New tech will also create new, productive and higher paying jobs. Ones we haven’t even dreamed up yet.

In the meantime, the jobs market is being measured by the tools needed to calculate the economy without knowing what the new jobs will be.

The lack of new entry-level jobs in the economy will be profundly shocking for the labor market for decades to come. Just as it always in the face of rapid new tech innovation.

~ Addison

Precious metals also figured prominently during the review with a 10-sigma move in silver, which tanked 32%. Peak-to-trough, gold also fell 9%, under $5,000.

We’ll have updates on this week’s Grey Swan Live! shortly. Stay tuned!

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time. That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!