The divergence between job openings and the S&P 500 has never been this extreme. Job openings have collapsed back to pre-pandemic lows. At the same time, the S&P 500 is soaring to record highs. What does it all mean? Let us explain. (a thread)
This split started in 2020 when millions of jobs disappeared overnight. Wall Street panicked briefly, but stocks rebounded almost immediately as stimulus flooded the system. And although the economy “boomed” in pockets of tech hiring during the pandemic, that momentum
Governments and central banks responded with historic intervention. Trillions in stimulus, zero rates, and asset purchases fueled a record surge in liquidity. That liquidity drove markets higher, but the job market never matched the pace, showing how detached Wall Street had
Corporations leaned into efficiency. Instead of rehiring at scale, they invested heavily in tech and automation. Workers were replaced by software and AI, margins improved, and productivity rose. The result: fewer postings, leaner payrolls, and record profits that fueled
Big Tech became the backbone of the rally. A handful of giants carried the S&P 500 to new highs. Their profits soared, their dominance grew, but headcount didn’t match output. Traditional hiring lagged while Wall Street’s growth depended more on fewer, larger companies.
Monetary policy headlines became the real driver. Fed speeches, rate cuts, and liquidity injections mattered more than jobs data. Investors bought every dip, chasing the promise of easy policy. Markets rallied even when the labor market gave off clear signs of weakness.
Global money poured into US equities. Foreign investors sought safety and yield. Pension funds and corporate buybacks added to demand. Capital flows mattered far more than the health of the US jobs market, creating a rally disconnected from the real economy underneath.
Productivity growth disguised weak hiring. Companies produced more with fewer people, boosting earnings while keeping job postings low. Wall Street rewarded efficiency, but Main Street saw fewer opportunities and stagnant growth. The disconnect stretched to historic levels.
Today, Wall Street is celebrating record highs almost weekly. But the labor market still hasn’t delivered a full recovery. If profits or liquidity fade, weak job growth could turn a downturn into something sharper than expected. The gap between markets and jobs has never
Wall Street and Main Street are living in different worlds. The market is fueled by liquidity, buybacks, and Big Tech strength. The labor market is stuck near pre-pandemic lows in openings. The real question, how long can this divergence last before it snaps back?
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@_Investinq Markets speak future, JOLTS speaks present: the S&P 500 prices tomorrow’s profits and rates, while openings track today’s hiring appetite. Fewer openings can cool wage growth, push rates lower, and lift margins, paradoxically cheering stocks. Add megacap concentration, global
@truthdotphd great summary and well said! that's exactly it!
@_Investinq They're shedding the work-from-home bloat from COVID...
@ShrewdInvestorX Yup, big part of it
@_Investinq I wonder how many people aged 65 and older are clinging to their jobs. Not saying the unemployed could fill their positions if they retired… depends on skillset… but who knows how many jobs could be filled. Ohh, so according to ChatGPT: Workers age 65+ who are employed / in the
@MotherEarth2024 I personally know a few who can't afford to retire right now. Quite sad
@_Investinq Nothing matters, infinite up cycle
@_Investinq The phenomenon that is the decoupling of profits and capital is perfectly explained by Yanis Varoufakis
@MeVale108 Yup, exactly right! Profits and capital accumulation are increasingly becoming disconnected more and more from traditional production and labor markets.
@_Investinq Donny keeps pumping with more debt and tweets, Barron and the pedophiles must be trading really well
@MagsinCO Pump it
@_Investinq Bullish!
@Stuffy504 bullish for sure
@_Investinq The best companies are always looking to be lean, green money making machines. No matter what is going on, on Main Street.
@thesuburbanmama well said!
@_Investinq It means that our mega tech is becoming more efficient that ever, and their valuations are still cheap when looking a few years out. Less than half the forward PE of the 2000 tech bubble, and profit margins are higher AND they have a lot more cash on hand relative to back then.
@_Investinq You were absolutely not replacing humans with GPT3.5 back in 22, it simply wasn't capable enough. With today's models I think AI displacement is either real or becoming real, but that's recent and this trend started before that so there's other forces at work in this data.
@_Investinq Feels almost like we’re living through a new kind of Industrial Revolution. Productivity is soaring thanks to tech, but jobs aren’t keeping pace. While Wall Street celebrates, Main Street struggles. If this keeps up, we may end up paying people to stay home… much like the
@_Investinq Game On 🏒 🐸 @grok
@_Investinq Looks like they should learn how to day trade!
@_Investinq Fuck the workers worship concentrated wealth from the bottom up no trickle down, wealth gap for smiling plutocrats and oligarchs. Tax the rich.
@_Investinq AI is supporting earnings growth with lower human resource requirements………
@_Investinq It’s the golden age of fraud.