This report shows the slowest hiring in 14 years.

PRE-OPEN MARKET COMMENTS THURSDAY – The government shutdown continues and it is impacting economic activity. We don’t have the BLS labor statistics so we have to lean on private companies that analyze the job market.

Yesterday, ADP reported that 42K jobs were created in the private sector during the month of October. That was a vast improvement from the -32K reported the previous month. ISM Services came in at 52.4 and that was better than expected and an improvement from the 50.0 reading last month. This is an important datapoint. As a survey, it is current.

This morning Challenger Gray & Christmas (CGC) provided a more dire outlook. “Through October, U.S. employers have announced 488,077 planned hires, down 35% from the 750,333 announced at this point in 2024. It is the lowest year-to-date total since 2011, when 459,971 new hires were planned. U.S.-based employers announced 153,074 job cuts in October, up 175% from the 55,597 cuts announced in October 2024. It is up 183% from the 54,064 job cuts announced one month prior,”

Maersk is one of the largest shippers in the world and they are considered an economic barometer. Their earnings and they were down 50% Y/Y, but they did raise their guidance for shipping volumes in 2026. They now believe they will grow by 4%. UPS reported earnings a week ago and they have laid off 10% of their workforce this year as they restructure. Amazon announced last week that they are laying off 4% of their workforce and they are one of the largest shippers.

AI, DOGE and tariffs are cited as reasons, but those could just be convenient excuses. Global economic conditions have been soft for more than a year. Debt levels are sky high across the spectrum from consumers to sovereigns and we are seeing cost cutting at every level.

Companies don’t like to lay people off ahead of the holidays so the CGC report is concerning. Last month they reported that planned holiday hires were at 25% of last year’s level. This is shocking to me. Not down 25%, they are a quarter of what they were. This is a sign that retailers are preparing for the worst.

We are in a period of seasonal strength, but the upward momentum is weak. The breakout to a new high came ahead of an expected rate cut and mega cap tech earnings. Since that news the market has pulled back to the breakout and we have seen signs of selling pressure. If support at $674 fails I believe we could probe deeper next week. Those odds increase if the shutdown continues.

I wanted to see the breakout at $674 tested and I wanted to fly off of it. That would indicate that buyers are aggressive and that they embrace the earnings releases. It seemed like that pattern was unfolding yesterday, but late day selling erased those early gains. The selling pressure was steady and that is NOT what I wanted to see. It is also why we wait for the candle to complete before we cast judgement.

I am holding off on new bullish positions. If the market lingers around the $674 level it is a sign that buyers are not interested and that we are likely to probe deeper. I am also ready to hedge my bullish positions (which are few in number) by shorting futures if I see selling pressure.

There are times when my market confidence is high and I swing for the fence and there are times when it is low and I err on the side of caution. Right now my confidence is low and I am waiting for clarity. A nice deep drop and a big bounce would spark my interest, but this wimpy little drift higher is not going to get me there.

The S&P 500 is down slightly overnight. Asian markets were strong and Europe was soft. There is not much of a tailwind.

Support is at $674 and resistance is at the high from Wednesday.