The SPDR S&P 500 ETF (SPY) recently closed at 666. So, what does that mean? Meanwhile, we’re getting confirmation of the recent weakness in the official payroll numbers, writes Ed Yardeni, editor of Yardeni QuickTakes.
Might the 666 close be signaling a market top this time? If so, then we can see that happening for the Magnificent Seven, as investors struggle to fathom whether all their spending on Artificial Intelligence (AI) infrastructure will ever be profitable. Meanwhile, the S&P 493 should continue rising on solid earnings. On balance, the S&P 500 should end the year at a new high of around 6,800.
(Editor’s Note: Ed is speaking at the 2025 MoneyShow Masters Symposium Sarasota, scheduled for Dec. 1-3. Click HERE to register.)
As for the job market, among the most real-time indicators are the three jobs availability series included in the Consumer Confidence Index (CCI) survey. In September, the “jobs-plentiful” series fell to 26.9%, while the "jobs-hard-to-get" series rose to 19.1%.
The “jobs-hard-to-get” series is highly correlated with the unemployment rate and suggests that it might have risen in September from August's 4.3%. However, while the former indicates that the duration of unemployment may be increasing, weekly initial unemployment claims data indicates that layoffs remain low.
There is also a good correlation between the CCI's jobs availability spread and the job openings series in the JOLTS report. The latter just came out for August, and might be heading lower in September, according to the jobs availability spread.
The pace of hires was a solid 5.1 million during August though. During economic expansions, this series typically exceeds the pace of separations attributable to layoffs and quits. During August, they were identical.
The spread between hires and separations is another way to measure the monthly change in payroll employment. This series is confirming the recent weakness in the official payroll numbers. We attribute the weak labor market data to a shortage of workers with the skills needed by employers, who are responding by doing what they can to boost productivity.
