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Dallas Fed data show net unauthorized immigration flows turning negative, meaning more individuals are leaving the US than entering, see chart below.
Sources: Federal Reserve Bank of Dallas, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The surge in new US business formation is being fueled by AI and large language models that are dramatically reducing the cost and complexity of launching a company, see chart below. As these firms scale, they will create jobs, underscoring that AI is likely to strengthen, not disrupt, the US labor market.
Sources: US Census Bureau, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Single-stock implied volatility continues to trade at a historically wide premium to index volatility, reflecting structurally lower implied correlation and persistent demand for idiosyncratic protection. Investors appear less concerned about macro shocks and more focused on widening dispersion between winners and losers in an increasingly concentrated equity market grappling with the implications of AI.
Sources: Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The Chicago Business Barometer for February showed strong improvements across production, employment, new orders and deliveries, see chart below. Perhaps we are underestimating the positive effects of the One Big Beautiful Bill, which took effect on January 1. The CBO estimates that it will boost GDP growth by 0.9% in 2026, and the chart below suggests that nonfarm payrolls in February could be significantly stronger than the 58,000 currently expected by consensus.
Sources: Market News International, US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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With low immigration and strong tailwinds to growth from AI spending, the industrial renaissance and the One Big Beautifull Bill, it is not a surprise that wage growth is rising for job switchers, see chart below.
Sources: Federal Reserve Bank of Atlanta, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The Strait of Hormuz is a key chokepoint for global oil trade, making any disruption an immediate risk to energy prices and macro outcomes. Our chart book, available here, examines energy demand and supply, as well as the significance of the Strait of Hormuz.
Sources: US Energy Information Administration (EIA) analysis, based on Vortexa tanker tracking and Panama Canal, Apollo Chief Economist 
Sources: Bloomberg, Macrobond, Apollo Chief Economist 
Sources: Bloomberg, Macrobond, Apollo Chief Economist 
Sources: Bloomberg, Macrobond, Apollo Chief Economist 
Note: Assumptions: If oil prices rise by $50/bbl in 1Q26. Sources: Bloomberg SHOK model, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Foreign demand for US assets remains very strong, see chart below.
Note: Data is a 12-month rolling sum. Sources: US Department of Treasury, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The average number of years a company remains in the S&P 500 index keeps declining.
Several factors are driving the faster churn in the index:
1. Creative destruction operates more rapidly, shortening the typical time a company remains large and competitive enough to stay in the S&P 500.
2. Technological innovation (IT, internet, AI, cloud, mobile) creates new business models that scale quickly and displace incumbents before they can adapt.
3. M&A and private equity activity more regularly remove large firms from public markets via buyouts or mergers.
The bottom line is that companies in the S&P 500 stay successful for shorter and shorter periods.
Sources: Creative Destruction Whips Through Corporate America, Corporate Longevity: Turbulence Ahead for Large Organizations – Executive Briefing, 2021 Corporate Longevity Forecast | Innosight, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The dramatic change in recent weeks in the narrative in markets from “the economy is strong” to “we are all becoming unemployed” is truly remarkable.
AI expectations are no longer just disrupting the equity market, with sectors such as software under pressure.
AI expectations have also sparked a macro conversation about a coming rise in the unemployment rate, despite no change in the underlying incoming economic story of a strong US economy driven by AI spending, the industrial renaissance and the One Big Beautiful Bill.
The bottom line is that rates investors are now pricing in rapid AI adoption that will push the unemployment rate higher and warrant many more Fed cuts by December 2026, see chart below.
In other words, markets are starting to believe the techno-optimists’ view of the world, rather than the more measured Fed and economist view.
I think the techno-optimists are wrong about the macro impact, and AI adoption is going to take much longer than the 12-18 months they talk about, and the overall impact on productivity will be much more muted.
Put differently, looking ahead to December 2026, the risk of an overheating economy remains larger than the risk of the unemployment rate going to 10%.
Sources: Bloomberg, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The average daily US equity market turnover now exceeds $1 trillion, driven by higher retail participation, more high-frequency trading and recent tech-sector volatility, see chart below.
Sources: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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