Wall Street Breakfast Wall Street Roundup: layoff surge, prolonged shutdown, cracks in AI trade
Nov 7, 2025
A surge in layoffs tops the list, with over a million job cuts reported this year. The impact of a government shutdown poses risks to economic stability and employment data. In the tech sector, concerns grow over AI earnings, especially as companies like AMD and Palantir show vulnerabilities. Valuations in the industry spark debates, particularly with notable investors like Michael Burry betting against key players. Bitcoin's wild swings serve as a barometer for speculative investing, while upcoming earnings reports from CoreWeave and Disney keep investors on edge.
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Layoffs Surpass Last Year Quickly
- Year-to-date U.S. job cuts hit about 1.1 million, already exceeding 2024's full-year total and signaling widespread layoffs beyond a few high-profile firms.
- The cuts reflect post-pandemic hiring corrections, AI-driven structural change, and cyclical softening in consumer and corporate spending.
Shutdown Raises Data And Spending Blind Spots
- The government shutdown removes key economic data and disrupts benefits and services, increasing risk of a sharper economic slowdown once data resumes.
- Prolonged shutdown effects like curtailed flights and SNAP payment uncertainty could materially reduce near-term consumer spending.
AI Rally Faces Execution Scrutiny
- The AI trade has propped up markets amid soft macro data, but recent earnings reveal cracks as investors begin to price execution risk into lofty valuations.
- Stocks with huge YTD gains sold off on otherwise solid reports, showing sentiment can flip when future execution is questioned.