- Mike Kelley
Stocks rallied on Wall Street on Tuesday after opening the week with a nothing sort of day on Monday.
First, the scoreboard:
Dow: 17,928.4, +222.4, (+1.3%) S&P 500: 2,084.4, +25.7, (+1.3%) Nasdaq: 4,809.9, +59.7, (+1.3%) WTI crude oil: $44.70, +2.9%
It’s a quiet week for economic data, but the big news crossing the tape this morning was the latest report on job openings, which showed the number of jobs open in the US was near a record high in March.
The latest Job Openings and Labor Turnover Survey – or JOLTS – report, showed in March there were 5.757 million jobs open in March.
“The number of job openings is not a reliable short-term leading indicator of payrolls, but it does suggest that employers remain very keen to hire, consistent with our view that the below-consensus April payroll number will prove a fluke,” said Pantheon Macroeconomics’ Ian Shepherdson in a note following the report.
Elsewhere in the JOLTS data, we noted that there is a persistent and growing gap in the number of jobs available and the number of hires being made each month. Basically: something isn’t clicking in the labor market.
Also in labor market news, grocery store chain Kroger announced that it would add 14,000 jobs in its grocery division. “So what?” one might say.
Well, Neil Dutta at Renaissance Macro is already ahead of you, writing Tuesday, “Before people say these are crap low paying positions, I would just point out the following chart of average hourly earnings across retail grocery stores …”
Speaking of jobs, Elena Holodny was out Tuesday with a big overview of the shift that is changing the global economy: the move away from agriculture and into services.
Services employment has surged to 46% of the global total in 2016, up from 34% in 1991. Over the past 25 years, about 75% of the 1 billion new jobs created in the world have been in services, according to figures cited by a Macquarie team led by David Doyle in a recent note to clients.
The same thing is happening with output data, as the share of GDP attributed to services has increased over the past four decades in both developed markets and emerging markets.
“Services have risen dramatically in importance and are increasingly dominant in shaping the outlook for global growth,” the Macquarie team wrote.
The upshots here are many.
For one thing, the bulk of profits, at least from S&P 500 companies, come from manufacturing, and so services companies present a new profitability paradigm for business.
Additionally, an increase in the services sector also means productivity growth will likely be lower in these services-dominated economies, though economic cycles will potentially be smoother as fewer outside forces like commodity prices will impact operations.
Institutional Investor’s annual list of the top earnings hedge fund managers was released Tuesday.
And as tends to be the case, the numbers were big.
Here are the five hedge fund managers, for example, that made over $1 billion last year. In all, the top five managers brought home $7.35 billion last year. A nice haul!
Jim Simons, who made $1.7 billion last year, used to work at the NSA. Here’s how he got from there to here.
Ray Dalio made a lot of money last year: here’s an interview with him.
And Joseph Edelman, who most people haven’t heard of, made $300 million last year.