Thoughts from Themes: Scrutinizing Soft Landings

Investors are increasingly focused on what happens when growth stories are tested by tighter financing conditions and operational reality. Nowhere is that tension more visible than in AI infrastructure, where rapid expansion has been rewarded, but not without consequence. At the same time, the U.S. labor market is sending quieter, more ambiguous signals: hiring is slowing, wage pressure is easing, yet conditions remain stable enough to avoid outright concern. This combination is reinforcing expectations for a more accommodative policy path ahead. With a data-heavy week on deck and sentiment already fragile, markets are less focused on upside surprises and more attuned to downside risk, balance-sheet resilience, and the sustainability of the narratives that carried the rally into the new year.

Market Minute

Markets are coming off a data heavy week in which several high impact U.S. releases and global indicators are likely to shape sentiment across equities, bonds, and currencies. The focus began with labor market updates, including the ADP National Employment Report and the Job Openings and Labor Turnover Survey,

both of which offered fresh insight into hiring momentum and wage pressures. These readings follow recent signs of cooling in the labor market and will help investors gauge whether the Federal Reserve is gaining confidence that inflation is easing.

Mid week attention shifted to the ISM Manufacturing and ISM Services indices, which remain critical barometers of economic activity and pricing trends. Any deterioration in new orders or employment components could reinforce expectations of slower growth. International trade data, wholesale inventories, and factory orders will further clarify the trajectory of goods demand and supply chain normalization. Last Wednesday’s report made clear that while manufacturing is continuing to follow a trend of contraction, the service sector has been remarkably robust, hitting a 14-month high.

Global markets will also monitor international releases such as European factory orders, Japanese consumer confidence, and trade balances across major economies, which collectively inform the outlook for global demand. Together, these indicators will shape expectations for monetary policy, influence Treasury

yields, and drive sector level rotations as investors reassess the durability of the soft landing narrative.

Watching CoreWeave:

Investors are increasingly signaling concern about CoreWeave’s balance sheet sustainability, despite the company’s strong revenue trajectory and central role in the AI infrastructure boom.

Recent analyses highlight a widening disconnect between CoreWeave’s rapid top line growth and the financial underpinnings required to support its aggressive expansion strategy. The most prominent issue is the company’s heavy reliance on debt financing, which has accelerated alongside its build out of high density data center capacity. Rising interest expenses and growing leverage have prompted questions about CoreWeave’s ability to maintain momentum should AI driven demand moderate or capital markets become less accommodating. Several investor focused outlets underscore that interest burdens are mounting at a pace that could constrain future flexibility.

Market performance has amplified these concerns. CoreWeave’s share price has experienced significant volatility, including a sharp decline in market value tied to fears of an AI sector correction and delays at a major data center project. These operational setbacks have reinforced investor skepticism about execution risk and the company’s ability to scale efficiently.

Financial results have added further pressure. While revenue continues to exceed expectations, CoreWeave recently reported a substantial quarterly loss, driven by

high operating costs, power related constraints, and debt service obligations. Analysts note that profitability remains elusive, raising questions about whether the company’s current growth model is sustainable without continued external financing.

While CoreWeave’s strategic position in AI infrastructure is compelling, its debt load, persistent losses, operational challenges, and sensitivity to market conditions are driving meaningful concern about long term financial resilience. The company’s

ability to transition from rapid expansion to durable profitability will be central to restoring confidence.

Employment Expectations

The latest U.S. employment report points to a labor market that is cooling but stabilizing, offering a nuanced picture for policymakers, investors, and corporate decision makers. December payrolls increased by 50,000 jobs, undershooting expectations and capping off the weakest year for hiring since 2020. Despite the slowdown, the unemployment rate edged down slightly to 4.4%, suggesting that labor demand remains soft but not collapsing. The combination of slower hiring, cooling wages, and stable unemployment supports the narrative that inflation pressures are easing without triggering a deep labor downturn. This strengthens expectations for Federal Reserve rate cuts later in the year.

Treasury yields typically fall on signs of labor market softening. The latest report reinforces the view that monetary policy can shift toward easing, supporting duration heavy fixed income strategies. And with a new, most certainly dovish Fed Chairman in the not-to-distant future, investors should prepare for a substantially lower fed funds rate and a growth-at-all-cost mindset by mid-2026.

This Week’s Major US Economic Reports & Speakers

Monday, January 12

12:30 PM Atlanta Fed President Raphael Bostic speaks

12:45 PM Richmond Fed president Tom Barkin speaks

6:00 PM New York Fed President John Williams speaks

Tuesday, January 13

6:00 AM NFIB optimism index

8:30 AM US Consumer price index

8:30 AM Consumer price index

8:30 AM CPI year over year

8:30 AM Core CPI

8:30 AM Core CPI year over year

10:00 AM US new home sales

10:00 AM St. Louis Fed President Alberto Musalem speaks

2:00 PM US budget deficit

4:00 PM Richmond Fed President Tom Barkin speaks

Wednesday, January 14

8:30 AM US retails sales (delayed report)

8:30 AM Retail sales minus autos (delayed report)

8:30 US Producer price index (delayed report)

8:30 AM Core PPI (delayed report)

8:30 AM PPI year over year

8:30 AM Core PPI year over year

10:00 AM US Business inventories (delayed report)

10:00 Existing home sales

11:00 AM Minneapolis Fed President Neel Kashkari speaks

12:00 PM Atlanta Fed President Raphael Bostic speaks

12:30 PM Fed Governor Stephen Miran speaks

2:00 PM Federal Reserve’s Beige Book

2:10 PM New York Fed President John Williams opening remarks

Thursday, January 15

8:30 AM Initial jobless claims

8:30 AM US import prices (delayed report)

8:30 AM Empire state manufacturing survey

8:30 AM Philadelphia Fed’s manufacturing survey

9:15 AM Fed Governor Michael Barr speaks

12:40 AM Richmond Fed President Tom Barkin speaks

1:30 PM Kansas City Fed President Jeff Schmid speaks

Friday, January 16

9:15 AM Industrial production

9:15 AM Capacity utilization

11:00 AM Richmond Fed President Tom Barkin speaks

3:30 PM Federal Reserve Vice Chair Philip Jefferson speaks

Disclosures:

All data sourced from Bloomberg as of January 9, 2026, unless otherwise cited.

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