G.L.A. Take: If Cathie is right that true inflation is already sub-2% and moving lower, the Fed is currently too tight. Rate cuts could come faster and deeper than the market expects. That is a massive catalyst for our portfolio companies.
💼 THE JOBS REPORT: WEIRD, NOT RECESSIONARY
Let’s break down what actually happened in that employment report and why it spooked markets without actually changing our thesis:
Household survey: -500,000 jobs (very unusual outside of recessions)
Non-farm payrolls: +57,000 (about half of expectations)
Labor force participation rate: Dropped — with a notable decline among women aged 24–35 (possibly childbearing-related, data unclear)
Youth unemployment: ~9.2% — prediction markets don’t expect it to drop below 7.5% this year
Wages: Pretty much in line
Consumption: Still steady — tends not to fall unless we’re actually in a recession
The key insight from Cathie: Companies are not hiring as rapidly because they’re using AI instead. New business applications are surging — solo entrepreneurs building companies with AI only — and that activity doesn’t show up in traditional employment surveys. The data isn’t capturing the entrepreneurial explosion happening right now.
Cathie’s advice (and we love this): If you’re looking for a job, identify a problem that frustrates you — one that probably frustrates others too — and build a company to solve it using only AI. You’ll go straight to the top of the hiring list at any firm that sees what you built.
At G.L.A., that resonates deeply. Innovation solves problems. Invest in the problem-solvers.
😟 WHY IS THE CONSUMER SO MISERABLE?
Despite consumption holding up, sentiment is terrible. Here’s the honest breakdown:
Savings rate dropped below 3.2% — families living hand-to-mouth due to food & energy inflation
Auto delinquency rates at all-time highs for subprime borrowers — consumers are letting cars get repossessed and prioritizing credit card payments instead (Uber/Lyft making personal cars less essential)
Housing affordability is broken — existing home sales cratering because buyers can’t stomach trading into a mortgage at double their current rate
New home prices are falling slowly; existing home prices fluctuating near zero
Mortgage rates well above 5.75%, trending higher — prediction markets don’t see them dropping below that level this year
Michigan Consumer Sentiment still far from the 65 level that prediction markets asked about
G.L.A. Take:This is short-term pain driven by rate-environment mechanics. If we’re right that inflation falls faster than expected and long rates come down (as they did during the Industrial Revolution), housing affordability could improve dramatically. Hold the line.
🤖 AI BOOM: JUST GETTING STARTED
This is the heart of our thesis, and Cathie delivered the data to back it up:
Real tech/AI capital spending has broken out of its 40-year range — we are in uncharted territory on the upside
Token prices have dropped 17% per million tokens — optimization is accelerating, making AI cheaper and more accessible
Manufacturing PMI is turning up — could be inventory-building around tariff uncertainty, but the trend is constructive
ARK itself has hired 3 engineers in the last year — firms their size almost never do that. AI-enabled productivity made it justifiable and necessary
Ramp Economics study: Companies aggressively adopting AI hired ~10% more people over two years vs. non-adopters — AI creates jobs for those who embrace it
Cathie sees labor shortages ahead, not mass unemployment. The companies solving AI problems will be the ones rewarded. Sound familiar? That’s Rule #3 of our Investing Bible — we are in the beginning of the largest innovation/productivity boom in human history.
💰 DOLLAR, BITCOIN & MARKET INDICATORS
Dollar: Cathie is bullish. Deregulation, tax cuts, and higher ROIC in the U.S. relative to the rest of the world are attracting capital. SpaceX’s IPO creating hundreds of millionaires, OpenAI and Anthropic on deck — American exceptionalism is NOT over. Kalshi prediction markets agree the dollar goes higher from ~100.5 today.
Bitcoin vs. Gold: Bitcoin appears to be in a bottoming process on a BTC/Gold basis. ARK believes it has bottomed and will resume its volatile but broad uptrend. 🔥
S&P vs. Oil & Gold: Both measures of “true wealth” threatened to break down during the Iran war / Strait of Hormuz fears — but both are rebounding. Cathie says they have far to go in this technology revolution.
Credit markets: All quiet. Bank CDS spreads are calm. High-yield spreads (junk bonds vs. Treasuries) barely flinched during the Iran war flare-up. No systemic risk signal. Blue Owl gated some private credit funds (one had ~40% withdrawal requests) — but it’s NOT spreading to the banking system.
10-Year Treasury Yield: The big question — will it break down? ARK believes if inflation falls toward 1–2% (or lower per Trueflation), the 10-year could see a significant drop. That would be the unlock for growth stocks and housing simultaneously.
Coach Kyle’s 2 Cents: With massive innovation comes massive disruption and “creative destruction”,Creative destruction is the continuous process of innovation in a capitalist economy where new technologies, products, business models, or companies destroy (or render obsolete) older, less efficient ones, leading to overall economic progress. It is “creative” because it generates new value, jobs, industries, and wealth.
It is “destructive” because it displaces existing companies, workers, skills, and capital.Classic Examples:
Smartphones destroying traditional mobile phones, landlines, cameras, watches, maps, and physical music players (e.g., Nokia, Kodak, BlackBerry suffered heavily).
Streaming services (Netflix, Spotify) destroying video rental stores (Blockbuster) and physical music sales.
E-commerce (Amazon) disrupting traditional brick-and-mortar retail.
Electric vehicles and ride-sharing apps challenging internal combustion engines and traditional taxi companies.
AI and automation currently threatening certain white-collar and manufacturing jobs while creating new ones.
“The most important thing in my opinion is to position our portfolio’s to take advantage of the disruptors, and to make sure on a daily basis that the companies we own are being disrupted.” – Coach Kyle
