Headwinds
What positioning data is telling us right now, and where I plan to deploy capital...
Marlin Capital Readers,
The Nasdaq just finished lower for the 6th time in the last 7 weeks.
There are many different factors plaguing this market right now. And they are coming from multiple directions simultaneously.
Let’s walk through each one. 👇
The Bull Case Is Eroding
Coming into 2026, 1 of the biggest pillars of the bull case was the Federal Reserve continuing to cut interest rates. Heading into the year, multiple cuts were expected.
That has changed dramatically.
The war in Iran has sent oil prices parabolic. When oil prices spike, inflation expectations follow. And when inflation expectations rise, the Fed’s hands are tied.
As of today, the Fed is now projected to cut just once this year.
I wouldn’t call the Fed cutting once a major market tailwind anymore. It is obviously not a headwind either, but the shift here is significant. What was a major tailwind coming into the year has now shifted to neutral. That is a meaningful change in the macro backdrop for stocks.
The AI Labor Market Shakeup Is Accelerating
I first covered this in “Heading Into March”. It started with Block (XYZ) announcing that they will be laying off ~40% of their workforce. The stock immediately rallied +24% on the news.
At the time, I said that Block’s positive stock reaction sends a very clear message to every other CEO in America. If you are struggling, cut your workforce significantly, attribute it to AI, and your stock will rally big. That is a powerful incentive.
Well, it didn’t take long.
On Friday, Reuters reported that Meta is planning sweeping layoffs that could affect 20% or more of the company. But Meta is far from alone.
Here are the total FAANG layoff tallies so far 👇
Meta: 20% layoffs (would be the largest single reduction in company history)
Amazon: ~30,000 gone (>10% of corporate workforce)
Microsoft: 13,000 gone
Read those numbers again. These are not small, struggling companies trimming fat. These are the largest and most profitable Tech companies on Earth, collectively cutting tens of thousands of white collar jobs.
Last Thursday, ServiceNow CEO Bill McDermott said that unemployment for new college grads could “easily” reach the mid-30% range due to AI.
There is no going back now. AI has already begun to forever alter the job market, and this is likely just the beginning.
Notice how sentiment towards Artificial Intelligence has shifted dramatically in 2026. Last year (following the April ‘25 Liberation Day lows), AI was new and exciting. The possibilities were endless. It was going to change the world for the better.
Now? AI is going to destroy the job market, and with it, the consumer-based economy.
Whether or not that actually plays out remains to be seen. But the shift in sentiment is very real, and sentiment drives markets in the short term.
Polymarket recession odds for 2026 have soared to 32%. For Marlin Capital readers who were with us during last year’s Liberation Day selloff, you may remember that the SPX bottomed at right around the same time Polymarket recession odds topped. This will once again be a key number to watch going forward.
But recession odds are not the only tool that helped us successfully navigate last year’s Liberation Day selloff. Positioning data was even more important.
On April 7th, 2025, the S&P 500 hit its Liberation Day lows.
2 days later, on April 9th, I wrote this at Marlin Capital (in “Bottomed Out”): 👇
That call was within 2 days of the exact market bottom.
Positioning data helped us call the bottom last April. And I believe it can help us again here in 2026. Let’s take a look at what positioning is telling us right now. 👇