Jobs, Defense, and the 21st Century Game of Thrones

The Pioneer Perspective - Week Ending January 9, 2026

What We’ll Cover

·       The Labor Market Continues to Weaken

·       President Trump and the “Dream Military”

·       Alphabet Versus Apple

·       SpaceX and the Space Race of 2026

The Labor Market

Crucial employment data was released this week bringing about conflicting points of view on the overall labor market. Initial Jobless Claims were released on Thursday and showed slightly better than expected numbers, though still relatively average. Next, we had the unemployment rate and non-farm payrolls, which were a bit more complicated. The unemployment rate came in at 4.4%, beating expectations of 4.5%, yet non-farm payrolls showed a miss of 10,000 jobs. This data demonstrates slowed hiring, rather than massive layoffs and panic. With a payroll miss and a drop in unemployment what we’re likely looking at is certain sectors slowing and others still showing strength. For example, leisure and hospitality showed strong job gains of +47,000, while retail took a massive hit at -11,000 jobs. We can likely attribute the slowing of retail to tariff anxiety. As for the unemployment rate coming in at 4.4%, this gives the Fed a much needed breather. For the time being, they are not panicking about an imminent recession but instead are adopting a “wait and see” approach. We believe that interest rates will remain paused at the next FOMC on January 28.

Due to unemployment coming in cold, and a now revised November unemployment rate of 4.5% (originally 4.6%) even our Sahm Rule recession indicator has cooled, though still elevated. In our December monthly newsletter we said this:

The Sahm Rule Recession Indicator is a measure of economic recession that has never failed. It measures unemployment on a three-month rolling basis. When unemployment rises more than 0.5% in a given three-month timeframe, a recession always ensues. The current level of the Sahm indicator is 0.43%. Here is an updated Sahm chart.

Here is the updated Sahm chart for your reference:

Retrieved from https://www.tradingview.com/chart/PAIfo4NN/?symbol=AMEX%3ASPY on 01/09/2026.

You can see that we had a Sahm level of 0.43 (remember 0.5 is the trigger) yet with today’s data at 4.4% and November’s revised data we have now dropped to 0.35. The indicator is still well above historical averages and in an uptrend, but did not trigger as we expected. We will be keeping a close eye on this each month and bring you the latest.

President Trump and the Trillion-Dollar Military

President Trump has proposed one of the most aggressive fiscal changes of the decade with his desire to increase our defense budget to $1.5T in 2027. To put it in perspective, our approved defense budget for 2026 was $901B, meaning this would represent over a 50% increase. Calling it the “dream military” he is citing growing geopolitical tensions around the globe as a reason for the increase. However, it’s important to note that this is not simply an increase in the budget but rather a total overhaul of the current military industrial complex. Let us explain.

President Trump explicitly stated that the increase is for “warfighters” and NOT wall street. Through an executive order, POTUS has put unprecedented restraints on private military companies.

1.    The Buyback Ban: States that if a company is found to have prioritized buying back its own shares rather than meeting delivery times or otherwise performing business in good faith then they are PROHIBITED from engaging in stock buybacks. This move is meant to protect the taxpayer. Since 2021, the top four defense companies have spent $89 billion on share buybacks and dividends, yet almost 67% of the money that these companies receive is directly through the US Treasury. President Trump is using the reasoning that since $58 billion was taken from the taxpayer and given to the shareholders they are not acting in good faith on behalf of the taxpayers who fund them. The EO he signed will put major restrictions on this kind of activity.

2.    The Raytheon Warning RTX 1.05%↑: President Trump called out Raytheon specifically, claiming that they are “the least responsive” and “the most aggressive” on shareholder payments. He threatened to cut them off entirely unless they agree to shift to a new business model with necessary factory upgrades.

3.    The $5 Million Cap: Perhaps the most personal part of the EO is a $5 million pay cap for CEOs of defense companies. With the average CEO of defense firms raking in $15-$25 million, this would be a noteworthy pay cut. The rule is simple, stay on track and demonstrate that taxpayer dollars are being spent wisely and you have nothing to worry about. However, if the Secretary of War Pete Hegseth conducts an audit and finds that the company is behind schedule, over budget, or otherwise failing to use money properly then the rule will take effect.

This proposal flips the way business is ran in these companies on its head. With growing concerns over the decades of corruption in “the military industrial complex” President Trump has attempted to remedy fears with the stroke of a pen. He is trying to simultaneously bring back trust into the industry while acknowledging its obvious necessity through increasing the budget.

Winter Has Come for House Apple

It’s official, AAPL -1.10%↓ has been unseated by GOOGL 0.25%↑ as the second most valuable company in the world. For years, Apple held the number one spot, until NVDA 0.78%↑ dethroned them in June 2024. Now, Apple falls again in rank with Alphabet taking the number two slot. This did not happen because of minor stock fluctuation or bad news, but because of business trends that favor Alphabet over Apple.

According to Finviz, Alphabet saw a 65% increase in growth during 2025. The 65% increase can be explained by a clear trend towards Alphabet’s AI, Gemini. Alphabet is now seen as the king of the AI trade by many investors.

While Alphabet saw massive gains in 2025, Apple saw an underwhelming 9% gain. In the world of big tech even a 9% gain is not good enough. Apple had many investors lose confidence when it announced the postponing of the next generation of Siri until 2026. Furthermore, sales in China slumped 5% for Apple as the Chinese Communist Party restricted Apple Intelligence, giving the Chinese alternatives an advantage. Lastly, many investors believe that Apple’s hardware has hit a wall. There are growing concerns that the iPhone, its signature product, has stagnated. A trend for Apple customers has appeared where they are actually waiting longer to upgrade their iPhones because the latest version seems no different than the one they already own.

The Dragon In the Room: The SpaceX IPO

The title above was only slightly a Game of Thrones reference, because SpaceX has a ship that’s literally called “the Dragon". Let’s talk about the most expensive IPO in history. First, it will immediately put SpaceX in the top 10 rankings of most valuable companies in the world. Second, it gives investors the much needed assurance that the space trade is no longer speculative. SpaceX captures three major advantages of space exploration in one company.

1.    Starlink: With over 8 million subscribers already, the projected revenue of Starlink will be roughly $24 billion in 2026. This branch of SpaceX provides the secure cash-flow that investors want to see.

2.    Starship: The main component of SpaceX, demonstrating it is possible to have high amounts of space travel at cheaper prices. With the innovative way that SpaceX has been able to capture returning propulsion tanks using the “chopsticks” they are able to save roughly $45 million per launch. This is something that had never been done before and was thought to be impossible. Before the innovation of the chopsticks, previous launches would simply discard the multi-million dollar tanks into the ocean.

3.    AI and Space: A new component to space that is now being considered is space-based data centers. For AI to work a company needs massive energy and massive cooling. Through solar, SpaceX can now capture the energy of the sun while having an infinite cooling supply of outer-atmospheric temperatures.

We’re already seeing the residual investing benefits of companies like RKLB 0.48%↑, RDW 1.55%↑, ASTS 7.89%↑, and others start to show even more historic gains. With semiconductors and AI being the big post-COVID investment, we believe the biggest investment of the decade will be space.

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Thanks for reading! Until next time, good luck out there and Godspeed.

© 2025 Pioneer Financial, LLC — All rights reserved. This newsletter is for informational and educational purposes only and does not constitute investment advice.