Clearly, the Fed needs to continue to cut key to stimulate the job market. On Thursday, placement firm , Grey & Christmas announced that there were 108,435 layoffs in January, up 118% compared to a year ago and a whopping 205% higher than the previous month. These corporate layoffs were the largest since 2009. Andy , workplace expert and chief revenue officer, said, “Generally, we see a high number of job cuts in the first quarter, but this is a high total for January.” He then added, “It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026.” I should add that the January is now scheduled to be announced on Wednesday, February 11th.
There have been a lot of high-profile corporate layoffs announced recently. There is no doubt that AI is now promoting layoffs, especially as warehouses become increasingly automated. This may explain why the Conference Board’s index recently hit a 12-year low, since job security remains uncertain. Due to the Fed’s unemployment mandate, I am expecting at least three additional Fed cuts in 2026.
The productivity enhancements from AI are expected to help to continue to boost growth. The data center boom continues, and there is no doubt that the AI revolution persists. Since Nvidia’s new Vera Rubin GPU is five times faster and ten times more energy efficient than its Blackwell GPU, you will be hearing about an AI replacement cycle in the upcoming years. In the meantime, the prices for advanced semiconductor chips and memory remain firm, so AI has ensured profitability for companies like , , and .
Despite some Wall Street concerns that OpenAI is struggling, the data center boom is clearly accelerating. on Tuesday announced that its fourth quarter sales surged 123% to $12.7 billion and its earnings rose to 69 cents per share. The company posted a whopping 22.1% sales surprise and a 40.8% earnings surprise, plus provided positive guidance. Since Super Micro Computer is one of Nvidia’s largest customers, I suspect that Nvidia will also be posting a big surprise, despite analyst expectations of 66.7% sales growth and 71.1% earnings growth.
One last thing, the U.S. and Iran are meeting in Oman on Friday to discuss dismantling Iran’s nuclear program. The U.S. wants Tehran to (1) stop from enriching uranium, (2) curb its ballistic missile program and (3) end its support for regional proxies that destabilize the Middle East. Iran has said it is willing to discuss only its nuclear work. Obviously, if these negotiations fail, the U.S. will conduct another military strike, which is why it has assembled a substantial Navy armada in the region.
