Review & Preview: Confusion Over Jobs

Nov 06, 2025 20:00:00 -0500 by Sabrina Escobar | #Markets #Review & Preview

Jobs Jolt. Weak labor market data spooked investors on Thursday, prompting a widespread selloff in stocks and a push into bonds.

The Nasdaq Composite shed as much as 1.9% Thursday. The Dow Jones Industrial Average fell 399 points, or 0.8%, and the S&P 500 lost 1.1%.

Revelio Labs, a workforce intelligence firm, reported on Thursday that the U.S. economy lost 9,100 nonfarm jobs in October.

Meanwhile, outplacement firm Challenger, Gray & Christmas said that U.S. employers announced 153,074 job cuts in October, up 183% from September. Through October, employers have announced close to 1.1 million job cuts, up 65% from the cuts announced in the first 10 months of 2024. Year to date job cuts are at the highest level since 2020, the firm found, and hiring plans are at their lowest since 2011.

Both reports painted a grim picture of the U.S. labor market, pushing many investors toward the relative safety of Treasury bonds. The yield on the 2-year Treasury note dropped to 3.56%, while the 10-year yield was down to 4.09%. The 30-year dropped to 4.69%. (Yields fall when bond prices rise).

The Challenger report cited several reasons behind the job cuts, including reductions to the federal workforce and cost-cutting. Investments in artificial intelligence may also be playing a role, but many economists note that it’s likely too early in the AI cycle to see more serious impacts on the labor market.

Andrew Hollenhorst, an economist at Citi, writes:

We are skeptical that [AI] is the primary driver given the cyclical slowing in hiring across various sectors of the labor market that should be affected very differently by AI. The negative story is that firms are looking to cut labor costs as underlying demand weakens. This becomes reinforcing as slower job growth generates less income growth.

Of course, labor market data from private providers such as Revelio and Challenger should be taken with a grain of salt. They don’t always align with official government data and can often conflict with other data sources. For instance, the ADP National Employment Report, released Wednesday morning, suggested that the economy added 42,000 jobs to private payrolls, a stronger figure than many economists expected.

But because of the government shutdown, federal economic data aren’t available, leaving many economists and investors little choice but to rely on third-party data providers to get a read on the economy.

Now that we’re on the subject, the shutdown stretches on, inching closer to the 40-day mark. It’s already the longest in history, but there are a few signs that it could be drawing to an end. Reports suggest that some Democrats are toying with striking a deal, but positive election results mean that other factions will push for the party to keep playing hardball on healthcare subsidies.

The Trump administration’s order to reduce air traffic by 10% at 40 major airports starting tomorrow aims to add extra pressure. Delta, American, United, and Southwest Airlines have confirmed they will reduce their flight schedules during the government shutdown in line with the order from the Federal Aviation Administration.

Company

Last

Chg

Chg%

Dow Jones Industrial Average

46,912.30

-398.70

-0.84%

S&P 500 Index

6,720.32

-75.97

-1.12%

NASDAQ Composite Index

23,053.99

-445.80

-1.90%

Market Data as of

The Hot Stock: Datadog +23.1%
The Biggest Loser: DoorDash -17.5%

Best Sector: Energy +1%
Worst Sector: Consumer Discretionary -2.3%

Created with Highcharts 9.0.1Thursday, Nov. 6Index performanceSource: FactSet

Created with Highcharts 9.0.1Nov. 6-2.25-2.00-1.75-1.50-1.25-1.00-0.75-0.50-0.2500.25%Dow industrialsS&P 500Nasdaq Composite

Elon Musk’s Trillion Dollar Question

Tesla shareholders overwhelmingly voted Thursday that CEO Elon Musk deserves to be paid a trillion dollars to head up the EV maker.

The package awards Musk approximately 425 million incentive-laden shares that vest if he meets certain milestones over the next decade, including an $8.5 trillion market capitalization and $400 billion in annual Ebitda, or earnings before interest, taxes, depreciation, and amortization.

If Tesla meets those goals, the value of Musk’s shares would come to about $1 trillion—or more.

The market cap goal seems realistic, writes Barron’s’ Tesla expert, Al Root. Shares need to compound at roughly 20% a year to get to $8.5 trillion by 2035. Coming into the week, Tesla stock has gained about 13% in 2025.

But Al writes that the Ebitda goal “looks more aggressive.” Analysts expect Tesla to make about $13 billion in Ebitda in 2025. That has to expand more than 30 times in 10 years to meet Musk’s target.

In more practical terms, Al estimates that Tesla is going to have to sell 20 million EVs cumulatively, reach 10 million subscriptions for its driver assistance product, deploy one million robo-taxis, and sell one million robots. He writes:

Selling the cars should be easy. Tesla has already sold about 8.5 million cars over its life. The other goals are dependent on Tesla improving and deploying the AI technology it uses to train cars to drive themselves and robots to do useful tasks. Today, Tesla has a few hundred robo-taxis on the roads. It doesn’t sell robots yet.

Wall Street largely expected shareholders to approve the package. Failing to do so would have risked making Musk unhappy and could even have prompted him to leave the company or spend more time on other endeavors, such as running SpaceX or xAI. To many investors, that scenario is “unfathomable,” Al writes.

Read Al’s full coverage of the Tesla annual meeting here.

The Calendar

Brookfield Asset Management, Brookfield Infrastructure Partners, Constellation Energy, Duke Energy, Enbridge, Franklin Resources, and KKR report quarterly results tomorrow.

The University of Michigan releases its Consumer Sentiment survey for November. Expectations are for a 54.2 reading, compared with 53.6 in October. Consumer sentiment remains in the doldrums despite record highs in the stock market. Consumer expectations for year-ahead inflation was 4.6% in October, and 3.9% for longer term inflation.

What We’re Reading Today

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