The major indexes appear to be parrying the effects of the coronavirus on their way to new highs again in this extended bull market, but job openings in December fell to their lowest level in two years, according to data from the Labor Department.

Data revealed that total vacancies stood at 6.4 million by the end of 2019, which is down from 6.8 million during the month of November. Wall Street estimates came in at about 6.9 million.

Per a CNBC report, the “Job Openings and Labor Market Survey is closely watched by Federal Reserve policymakers as an indicator for where employment trends are heading. The total vacancies outnumber job seekers by nearly 700,000, down nearly by half from a few months ago. There are now fewer nongovernment job openings than there are unemployed.”

“Net, net, job openings around the country are plummeting in a way that we hate to say looks like a recession,” said Chris Rupkey, chief financial economist at MUFG Union Bank.

The latest data comes after private payrolls rose by 291,000 during the month of January, which constituted its best month since May 2015, based on data from ADP and Moody’s Analytics.

The latest number bested the 150,000 estimate expected by economists surveyed by Dow Jones. Furthermore, data shows that the gap between full employment is still a good distance given that unemployment is at historically low levels.

A tightening labor market creates an opportunity for investors to trade relative weight ETFs. One one hand, they can capitalize on the Direxion FTSE Russell US Over International ETF (NYSEArca: RWUI). RWUI offers investors the ability to benefit not only from domestic U.S. markets potentially performing well but from their outperformance compared to international markets.

RWUI features:

  • Seeks investment results, before fees and expenses, that track the Russell 1000®/FTSE All-World ex-US 150/50 Net Spread Index (the “index”).
  • The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in securities that comprise the Long Component of the index or shares of ETFs on the Long Component of the index.
  • The index measures the performance of a portfolio that has 150% long exposure to the Russell 1000® Index (the “Long Component”) and 50% short exposure to the FTSE All-World ex-US Index (the “Short Component”).

Investors looking to play the other side can use the Direxion FTSE International Over US ETF (NYSEArca: RWIU)  to capitalize on international equities will outdoing U.S. equities. RWIU seeks investment results, before fees and expenses, that track the FTSE All-World ex US/Russell 1000 150/50 Net Spread Index, which measures the performance of a portfolio that has 150 percent long exposure to the FTSE All-World ex US Index and 50 percent short exposure to the Russell 1000® Index.

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