(posted 2023-Sep-08)
which will bounce back?
The rate of change of Job openings is well correlated with the general direction of US equities. Since the start of this year they have diverged. There are precedents but in all cases they eventually make and get back together. One question to ask is which leads? the precedents in the years 2013, 2015, and 2017 seem to point to S&P leading the way and the jobs follow within 6-9 months. But without digression, we assert that the environment of 2007 is more applicable and then, Jobs (red) led the way (down). Longer-term, we are still convinced of a wide range bound market as have been described in previous postings for a number of years to come. The picture is not as ugly for the stocks as the divergence is in an absurd part due to the huge contribution of a mere 5-7 stocks driving the S&P500. They too will come back to earth soon, possibly leading the way.
