Here’s the good news: Private employers are hiring.

In a preliminary report today, payroll processor ADP revealed that private companies added an average of 14,250 jobs per week in the four weeks ending Oct. 11. That’s a healthy rebound from last month, when ADP noted that private companies cut 32,000 jobs over the course of September.

Here’s the bad news: Public employers are firing.

Today, Amazon announced it’s laying off 14,000 corporate employees; UPS revealed it cut 34,000 jobs last quarter; and Chegg is slashing 45% of its workforce, or about 388 employees. They join Target (firing 1,800 corporate employees), and Paramount Skydance (cutting 1,000 jobs) in a broad effort among corporations to reduce headcount.

Is this good for stocks?

That depends.

UPS’ firings were well-communicated by management, and part of an effort to reduce overhead now that the company has ended its arrangement with Amazon, its largest customer. Shareholders applauded the move, and the stock rose 8% today (strong earnings helped, too).

Chegg’s announcement, however, came as an unpleasant surprise. It is seen as the latest sign that the online learning company is struggling to compete with AI, more desperation than calculated business maneuvering. Shares dropped 13.19% today.

Amazon falls somewhere in between. Management said it is trying to cut bureaucratic red tape and become more nimble in an effort to stay ahead of the competition. Investors seemed understanding, with shares rising just 1%.

Is this AI’s fault?

In the case of Chegg, yes, absolutely. UPS, however, seems unfazed by AI.

As for Amazon, the company didn’t specifically mention AI in its blog post. However, CEO Andy Jassy has previously said that AI efficiencies will mean the company will be able to get more done with fewer people, and today’s announcement was all about how the company wants to act more like a lean startup.

Jassy’s not the only one with big AI ideas: Management at Walmart, Airbnb, Intuit, Duolingo, Salesforce, Shopify, Klarna, JPMorgan, and Goldman Sachs have all gone on the record this year saying that they either plan to cut headcount or simply won’t hire as many people in the future, due to AI.

Here’s the worse news: Private employment growth is good, but layoffs from massive publicly traded companies will likely offset those gains, leaving the job market squished between an AI-shaped rock and a hard place.

Companies are hoping that AI creates efficiencies to boost profitability, which is great for investors. As for the economy, if these companies are firing people but then filling roles later on, everything will be OK. But considering that doesn’t seem to be the case right now, this could be the beginning of a very long, cold winter for the labor market.—MR

🟢 What’s up

• OpenAI has completed its restructuring, leaving Microsoft with a 27% stake in the company’s for-profit arm. Shares of the tech giant rose 1.98%.
• Nokia soared 22.74% on the news that Nvidia is taking a $1 billion stake in the cellphone maker and telecom equipment provider.
• Wayfair skyrocketed 23.22% after the online furniture retailer revealed a standout quarter, with tariffs taking a smaller bite of the business than feared.
• Skyworks Solutions and Qorvo are merging in a cash-and-stock deal to create a new $22 billion company. Skyworks jumped 5.83%, while Qorvo popped 5.74%.
• PayPal surged 3.94% thanks to a one-two punch of great earnings, and a new deal to provide checkout services for ChatGPT users.
• The US government announced plans to spend $80 billion building nuclear reactors powered by Westinghouse. Parent companies Cameco and Brookfield Asset Management popped 23.41% and 1.01%, respectively.

What’s down

• Kenvue, which makes Tylenol, fell 3.78% after the state of Texas sued the company for allegedly failing to warn pregnant women of the medication’s links to autism. Johnson & Johnson, Kenvue’s former parent company, was also named in the suit and dropped 1.77%.
• CarMax will be kicked off the S&P 500 and moved to the S&P SmallCap 600 on Friday. Shares fell 1.38% on the news.
• Royal Caribbean lost 8.48% even though the cruise line beat earnings expectations and raised its fiscal forecast. Investors were expecting more, and pushed shares lower in disappointment.
• DR Horton dropped 3.17% after the homebuilder revealed lower profits and weaker margins due to increased homebuyer incentives.

The 60/40 portfolio is so over.

According to Charles Schwab’s latest Modern Wealth Survey, two in five Americans now believe that the 60/40 portfolio is outdated, while two-thirds think success in the markets requires supplementing boring old stocks and bonds with newer assets such as crypto and alternatives, including venture capital and hedge funds.

Speaking of crypto, two in five American investors also see digital assets as a good investment, according to the survey. Of those surveyed, 35% currently own crypto, and 53% see the asset class as having long-term potential.

The results mirror a trend that’s been building among everyday retail traders for a while now: Many are forgoing traditional, slow and steady investing vehicles for the excitement and high risk/high reward of meme stocks, crypto, and leveraged ETFs. About half of those who responded to the survey say investing requires more short-term risk taking.

But that doesn’t mean caution has been completely thrown to the wind. “What stood out even more is that younger generations are showing this discipline. Sixty-two percent of Gen Z investors say they are more patient now than when they began, and Millennial investors lead the way at 72%,” explained Head of Wealth Management Research at Charles Schwab Rob Williams in a written comment to Brew Markets. “That’s pretty amazing when you think about all the noise and distractions that investors, especially younger investors, are facing today and goes against some of the stereotypes you hear about Gen Z being the “FOMO” generation or overly focused on instant gratification.”

Maybe the gamification of everything hasn’t turned the stock market into a full-on dystopian casino after all.—LB

Hurricane Melissa has grown into a massive Category 5 storm barreling straight for Jamaica, where it made landfall today in what’s expected to be the worst storm to ever hit the island nation.

It’s obviously a horrible disaster for the country and its citizens, but the hurricane’s arrival also brings with it bad news for investors holding a very specific sort of investment: catastrophe bonds.

Catastrophe bonds are securities in which investors provide insurers with the money they need to pay claims from natural disasters like hurricanes, earthquakes, and more. Effectively, they transfer the risk of enormous insurance payouts from the insurer to investors: The idea is that if a disaster arrives that’s so massive that insurance companies can’t pay out all their claims, capital markets can provide the liquidity needed to cover the rest.

Hurricane Melissa’s arrival in Jamaica will likely trigger the country’s $150 million catastrophe bond, organized last May by the World Bank. But while that money will go to helping the country recover from this disaster, it will likely be a drop in the bucket: Experts forecast total damages will cost somewhere between $5 billion and $16 billion, according to Bloomberg.

A disastrous investment

Catastrophe bonds are high-risk, high-reward investments. Investors receive sizable yields for buying the bonds: Jamaica’s bond pays out a yield of about 7%, compared to a 10-year Treasury yield of just under 4% today.

But in exchange, if a natural disaster strikes before the bond matures, investors lose everything. That may sound like a gamble, but since catastrophe bonds first appeared on the market in the 1990s, they’ve been growing more popular. The Financial Times reported in July that insurers had already sold $18.1 billion in catastrophe bonds this year, compared to $17.7 billion across all of 2024.

While the rewards currently outweigh the risks, that math may soon change for one simple reason: Climate-related disasters are arriving with increasing regularity.

“The average annual cost of natural catastrophes from 2017 to 2024 has cost insurers $146 billion,” according to Gallagher Re’s 2024 Natural Catastrophe and Climate Report. But last year, public and private entities paid out $154 billion around the world for natural disasters. Fewer hurricanes than forecast means that this year may be better for bond holders, but disasters still abound: The California wildfires alone will cost the US $40 billion.

Only time will tell if these investments remain profitable, or if they turn into a market catastrophe.—MR

• Trump Media is entering the prediction market business.
• Wall Street is trying to downplay private credit problems, even as HSBC and BNP Paribas SA report new losses tied to the Tricolor and First Brands bankruptcies.
• Home prices rose in August, but at a slower pace than inflation—which means homeowners are losing money.
• The AI Super Bowl kicked off in Washington, DC today as Jensen Huang took the stage for his keynote address at Nvidia’s annual GTC conference.
• President Trump is expected to reveal his pick for Fed chair before the end of the year. Here’s his shortlist of candidates.
• Solana, Litecoin, and Hedera ETFs are hitting the market this week, ushering in a new era of crypto investing.
• Nobody’s job is safe these days: Hollywood studios are increasingly using AI to insert four-legged friends in post-production rather than hiring real-life animal actors.

2025 has been a wild ride, but the next two days may be the wildest of them all.

Tomorrow is the biggest day of earnings season by market cap, with Alphabet, Microsoft and Meta Platforms dropping their latest numbers. We’ll also hear from heavy hitters like Starbucks, Chipotle, eBay, Carvana, ServiceNow, MercadoLibre, Caterpillar, Boeing, Verizon, CVS Health Corp, Fiserv, ADP, Etsy, Kraft Heinz, UBS, Garmin, GlaxoSmithKline, Brinker International, Deutsche Bank, and MGM Resorts

But the spotlight shifts back to the US government when the FOMC’s two-day meeting concludes. After a delayed CPI report revealed inflation had risen more slowly than expected, investors are sure that Jerome Powell will announce the next interest rate cut tomorrow afternoon.

Don’t forget that we’ve got earnings from Amazon, Apple, and 190 other companies on Thursday. Plus, President Trump is meeting President Xi in South Korea as the US and China try to reach a trade agreement.

Buckle up, boys and girls—the ride’s not over yet.