Rising Job Cuts and Extreme Market Complacency Signal Elevated Downside Risk in 2026
PHOENIX, Feb. 09, 2026 (GLOBE NEWSWIRE) -- Recent labor market data and investor positioning trends are flashing warning signs that U.S. financial markets may be significantly underestimating downside risk as 2026 unfolds, according to Michael Eisenga, Chief Executive Officer of 1st American Properties.
U.S.-based employers announced 108,435 job cuts in January, representing a 118% increase year-over-year and a 205% surge from December, according to Challenger, Gray & Christmas. This marks the highest January total since 2009 and the largest monthly reading since October 2025.
“While elevated job cuts are not uncommon in the first quarter, this magnitude is concerning,” said Eisenga. “These reductions were largely planned at the end of 2025, which tells us corporate leadership entered 2026 with a notably pessimistic outlook.”
That caution is increasingly evident in hiring trends. The January 2026 ADP National Employment Report showed only 22,000 private-sector jobs added, less than half of expectations and a sharp deceleration from already-weak December figures. Growth was narrowly concentrated in education and health services, masking contraction in cyclical areas such as manufacturing and professional services.
“This is not the profile of a resilient labor market,” Eisenga added. “When job creation depends on a single defensive sector to offset broad-based weakness, it signals late-cycle fragility rather than sustainable expansion.”
Despite these economic warning signs, investor behavior suggests a striking level of complacency. Bank of America’s Global Fund Manager Survey indicates that cash allocations are at their lowest level in over two decades, with minimal downside hedging in place. The firm’s Bull & Bear Indicator is registering an extreme bullish reading, historically viewed as a contrarian sell signal. At the same time, short interest across equities sits near a twenty-year low.
“This disconnect between deteriorating fundamentals and aggressive risk positioning is exactly what precedes periods of market repricing,” Eisenga said. “When optimism is crowded and protection is absent, even modest negative surprises can trigger outsized volatility.”
Eisenga emphasized that investors and operators alike should prioritize capital preservation, balance sheet strength, and disciplined underwriting in the months ahead.
“The data does not support complacency,” he concluded. “Markets are priced for stability at a time when economic signals argue for caution.”
About First American Properties
First American Properties is a privately held investment and real estate management firm headquartered in Columbus, Wisconsin. The firm specializes in strategic asset acquisition, development, and portfolio management across diverse sectors of the U.S. economy.
Disclaimer: This press release is for informational purposes only and does not constitute investment advice. Forward-looking statements are subject to risks and uncertainties.
Media Contact:
First American Properties
Michael Eisenga, CEO
meisenga@firstamericanusa.com
(920) 350-5754
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