Howard Marks Defends AI Valuations With Revenue Data

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[1] Why the A.I. Boom Is Unlike the Dot-Com Boom - The New York Times (https://www.nytimes.com/2025/12/09/technology ...)[2] The Rise Of The Vibe-Coding Soccer Mom: How “Regular” People Are Building Wealth With AI - Forbes (https://www.forbes.com/sites/jaimecatmull/202 ...)[3] Buy this global chipmaker over Nvidia as AI competition ramps up, F.L.Putnam strategist says - CNBC (https://www.cnbc.com/2025/12/09/buy-this-chip ...)

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Dec 09 2025, 14:25

Wacker Chemie Cuts 1,500 Jobs Amid Industry Crisis

## Executive Summary **Wacker Chemie AG** announced a significant workforce reduction, planning to eliminate over 1,500 jobs by the end of 2027. This measure, affecting 9% of its global workforce, is a core component of a broader strategy to achieve €300 million in annual cost savings. The company has identified persistently high energy costs and mounting competition from Chinese firms as the primary drivers for this restructuring, signaling a critical response to structural challenges pressuring the European chemical sector. ## The Event in Detail The restructuring plan aims to deliver €150 million in annual savings directly from the job cuts. This is part of a wider, €300 million annual savings initiative designed to enhance the company's long-term financial resilience. The decision follows a period of underperformance and reflects a strategic pivot to address what are now seen as permanent shifts in the global market. The cuts are a direct reaction to an operating environment where German industrial firms are increasingly at a disadvantage due to energy prices that are structurally higher than in other regions and the growing market share of state-supported competitors from China. ## Market Implications This announcement is the latest in a series of similar actions by major European industrial players, confirming a bearish outlook for the continent's manufacturing base. For **Wacker Chemie**, the move is intended to stabilize its financial footing, though it may lead to negative investor sentiment in the short term. The decision validates the concerns expressed by industry leaders in the "Antwerp Declaration," which warned of a potential deindustrialization of Europe. Data shows that key sectors like chemicals have already shifted from being net exporters to net importers, a trend this workforce reduction underscores. ## Expert Commentary The strategic playbook being deployed by **Wacker Chemie** mirrors actions taken by peers across the industrial landscape. **Sasol**'s EVP, Antje Gerber, recently described a similar three-pronged strategy focused on optimizing its asset base, reducing the cost structure, and adopting a "value over volume" approach. Other chemical giants, such as **Mitsubishi Chemical**, have also undertaken large-scale workforce restructuring, accepting significant one-time losses (€27.7 billion in Mitsubishi's case) to secure billions in future annual savings. Similarly, US-based **Graphic Packaging (GPK)** announced plans for $60 million in savings from staff reductions, highlighting that cost optimization is a global theme in the industrial sector. ## Broader Context **Wacker Chemie**'s job cuts are a clear symptom of a larger crisis facing European heavy industry. A recent Deloitte study noted that industrial output across the EU fell by over 10% in just two years, with countries like Belgium seeing a 13% drop. This decline is not isolated to chemicals; steel manufacturers like **ArcelorMittal** also cite intense global competition and unfavorable market conditions for potential job losses. The underlying issue, as noted in multiple industry reports, is a political and regulatory environment in Europe that has struggled to balance sustainability goals with the need for competitive and reliable energy. While Brussels has initiated programs to simplify regulations, many business leaders argue these measures are too slow and fail to address the core energy cost disadvantage, forcing companies to make difficult decisions to ensure their survival.

Dec 09 2025, 14:20

U.S. Job Data Reveals Economic Crosscurrents

## Executive Summary Recent labor market reports present a fractured view of the U.S. economy, complicating the outlook for investors and policymakers. Data from **ADP** suggests a minor increase in private payrolls on a weekly basis, but this is overshadowed by a larger monthly decline and a separate, more comprehensive report from **Challenger, Gray & Christmas** indicating a significant acceleration in job cuts. This divergence highlights a choppy hiring environment where corporate caution is mounting, even as financial markets anticipate a dovish pivot from the **Federal Reserve**. ## The Event in Detail The latest data reveals deep crosscurrents within the U.S. labor market. According to **ADP**, private companies added an average of 4,750 jobs per week in the four weeks through November 22. However, this small gain stands in stark contrast to **ADP's** own month-end report, which stated the private sector lost 32,000 jobs in November. Further compounding the negative outlook, a **Challenger, Gray & Christmas** report detailed 71,321 job cuts across all industries in November, a 24% increase compared to the same month last year. This marks the eighth time this year that monthly job cuts have surpassed 2024 levels. The retail sector has been hit particularly hard, with announced job cuts for the year soaring by nearly 140% compared to the same period in 2024. The primary driver cited for these layoffs was corporate restructuring. ## Market Implications Despite the troubling layoff data, financial markets remain fixated on the **Federal Reserve's** upcoming policy decision. U.S. stock index futures edged higher as traders have priced in an 87.4% chance of a 25-basis-point interest rate cut. This optimism suggests investors are weighing the potential for monetary easing more heavily than the signs of a cooling labor market. The hospitality industry offers further evidence of a slowing economy. While Thanksgiving holiday travel demand was the second-highest on record, U.S. hotel revenue per available room (RevPAR) decreased by 0.3% in the last two weeks of November. More critically, average daily rate (ADR) gains remain below the rate of inflation, continuing to pressure profit margins. Performance is also bifurcated, with **Luxury** chain hotels seeing solid demand growth while **Economy** hotels experience an 8% decline in RevPAR. ## Expert Commentary Industry analysts interpret the data as a sign of increasing corporate reticence amid economic uncertainty. The number of CEO changes has fallen for five consecutive months compared to 2024 levels, leading one expert to comment on the trend. > "This reversal over the last couple of months shows companies have likely lowered their tolerance for change," said Andy Challenger, workplace and labor expert for Challenger, Gray & Christmas. Regarding the high layoff figures, Challenger noted the historical significance: > "Job cuts in November have risen above 70,000 only twice since 2008: in 2022 and in 2008.” ## Broader Context The current labor market reflects a broader economic restructuring. For the year to date, **Artificial Intelligence (AI)** has been cited as a factor in 54,694 layoff plans. Simultaneously, regional economies are experiencing dramatic shifts. In southeast Saskatchewan, for example, the healthcare and social assistance sector saw employment drop by 38% over five months, while the construction industry grew by 20%. Notably, self-employment in that region has surged to become the largest employment category, accounting for 16.9% of all workers. This trend of a shrinking labor pool, where individuals exit the workforce entirely, combined with sectoral shifts, points to a complex and evolving economic landscape that defies simple categorization.

Dec 09 2025, 14:10

Natural Gas Futures Retreat On Mild Weather Outlook

## The Event in Detail United States natural gas futures retreated, correcting some of the previous week's significant gains, in response to updated weather forecasts indicating milder temperatures. The **Nymex** January contract declined by 4.3%, settling at **$5.062 per million British thermal units (MMBtu)**. This move was primarily driven by weather models showing that severe cold would be largely confined to northwestern Canada, with more temperate conditions expected across the U.S. Northeast. The revision eased concerns about potential production disruptions from "freeze-offs" and tempered expectations for near-term heating demand. This trend is mirrored in Europe, where natural gas prices have fallen by over 40% this year, a result of ample Liquefied Natural Gas (LNG) supplies and a mild winter that has kept storage levels high. ## Market Implications The immediate effect of falling futures is reduced pressure on energy costs for consumers and industrial users. However, the price of natural gas remains at a three-year high, significantly altering the economics of power generation. The current price point makes coal a more financially attractive fuel for utility providers. According to the **U.S. Energy Information Administration (EIA)**, the price of natural gas for electric power plants is expected to increase by 37% in 2025. This cost dynamic is creating a "coal comeback," where utilities are incentivized to increase generation from coal-fired plants, potentially delaying planned retirements. ## Expert Commentary Market analysis from experts highlights the pivotal role of weather in short-term price movements. **Gary Cunningham** of **Tradition Energy** noted: > "Weekend model runs now show the most severe cold limited to northwestern Canada and the cold in the U.S. much more tame and confined to the Northeast. The shift warmer should also help limit any production impacts from freeze-offs which had been anticipated in the prior runs." Looking forward, Cunningham anticipates that "spring to see some selling as the weather revisions get modeled into storage projections." On the broader fuel-switching trend, research firm **Wood Mackenzie** has adjusted its long-term outlook. The firm previously projected a 60% decline in U.S. coal-fired power generation by 2032 but has since revised that forecast to a more modest 39% drop, citing the boom in data center investment and higher natural gas prices. ## Broader Context While weather dictates short-term volatility, the structural outlook for U.S. natural gas is shaped by robust demand, particularly from global markets. The **EIA** reports that U.S. working natural gas stocks are 5% above the five-year average, yet prices remain elevated due to record-high LNG exports. The agency forecasts LNG exports to climb by 25% in the current year and an additional 10% in 2026. This sustained export demand, combined with relatively flat domestic production, is expected to provide a floor for prices. The **EIA** projects the **Henry Hub** spot price will average **$4.00/MMBtu** in 2026, representing a 16% increase over 2025 averages. Furthermore, surging electricity demand from power-intensive sectors like artificial intelligence is forcing a reassessment of the grid's capacity needs, potentially extending the operational life of both natural gas and coal power plants.