Just how important are jobs to the equity markets? If I didn’t know any better I’d think this chart was the S&P 500. As you can see, the inverse chart of the initial jobless claims data has a disturbingly high correlation with the equity market in the last 18 months. Keep an eye on those weekly jobless claims. The likelihood of this correlation ending is very low as jobs growth remains the one primary missing link in the economic recovery:
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.