Movements in the U.S. stock market have been highly correlated to the unemployment data released each week by the government, according to a recent report.
Since 2000, changes in the four-week moving average of the number of people filing for new unemployment insurance benefits have been inversely related to the weekly movements of the S&P 500 index. In other words, as claims have risen, the market has fallen (and vice versa). The correlation is strong and statistically significant, according to James Paulsen, chief investment officer at Wells Capital Management and the author of the report.
For many investors, this finding is something of a coup. The weekly jobless claims report is sometimes brushed aside by market watchers and pundits in favor of the broader monthly unemployment report. However, the new study suggests investors might have more – or at least as much – success by doing the opposite, or at least paying the weekly number more attention. (more)
No comments:
Post a Comment