Yardeni QuickTakes (Page 101)

Market Call: The Breadth Question

May 14, 2023 2 min read paid

They are back in their saddles again. The Magnificent 8 (a.k.a., the MegaCap-8) have been leading the stock market higher again. They've regained much of the market cap share they lost during last year's bear market, especially in recent weeks. They currently account for 24.7% of the S&P 500 index and 46.5% of the S&P 500 Growth index

Ed Yardeni

The Economic Week Ahead: May 15-19

May 13, 2023 2 min read paid

The week ahead is jampacked with coincident and leading economic indicators. The most up-to-the-minute ones will be May 12 mortgage applications (Wed) and May 13 jobless claims (Thu). The former seems to be bottoming suggesting that April housing starts (Wed) and existing home sales (Thu) might surprise to the upside, or at least not on the downside (chart) On a four-week moving average basis, jobless claims have moved higher recently

Ed Yardeni

Yellen's Drop Dead Date

May 11, 2023 2 min read paid

Treasury Secretary Janet L. Yellen said on Monday, May 1 that the United States could run out of money to pay its bills by June 1 if Congress does not raise or suspend the debt limit, putting pressure on President Biden and lawmakers to reach a swift agreement to avoid defaulting on the nation’s debt. In a letter to House Speaker Kevin McCarthy, she wrote: "After reviewing recent

Ed Yardeni

Dr Ed's Video Webcast 5/10/23

May 10, 2023 1 min read paid

The stock market has been climbing since mid-October even though pessimism has prevailed among economists and stock market strategists. Today, we examine this “pandemic of pessimism”—how widespread it is, our perspective on the bearish case, what the Fed’s staff thinks is ahead for the US economy, and a few of the voices of doom. … We counter that the stock market’s trend is driven mostly by the earnings

Ed Yardeni

Credit Crunch Ahead?

May 9, 2023 2 min read

SLOOS was on the loose today, yet stock prices continued to snooze. The Fed's Senior Loan Officer Opinion Survey was released yesterday after the market's close. It showed that banks continued to tighten their lending standards following the banking crisis that started during the second week of March (chart). Yet the DJIA barely budged falling 56.88 points and the S&P 500 lost just

Ed Yardeni

The Bears' Two Favorite Charts

May 8, 2023 2 min read paid

To support their pessimistic outlook, bearish prognosticators tend to focus on two charts. The first one shows the S&P 500 versus the securities held by the Fed, which account for most of the Fed’s balance sheet (chart). They contend that the bull market in stocks from 2009 through 2021 was driven by the Fed’s various quantitative easing programs. The S&P 500 peaked at a

Ed Yardeni

Market Call: Tug of War

May 7, 2023 2 min read paid

The bulls and the bears continue their tug of war with the S&P 500 fluctuating around 4000 since last summer (chart). The index rebounded off its 50-dma on Friday. The 200-dma has been crawling higher since the start of this year. In mid-March, when the banking crisis started, the breadth of the market narrowed as evidenced by the drop in the ratio of the S&P 500

Ed Yardeni

Hard to Have a Hard Landing When Employment Is Growing

May 7, 2023 2 min read paid

The S&P 500 rallied on Friday following yet another stronger-than-expected employment report. In his press conference on Wednesday, May 3, Fed Chair Jerome Powell observed: “It’s interesting [that] we’ve raised rates by 5 percentage points in 14 months, and the unemployment rate is 3½% pretty much where it was, even lower than where it was, when we started.” On Friday, we learned that the unemployment rate

Ed Yardeni

The Economic Week Ahead: May 8-12

May 6, 2023 2 min read paid

Another interesting week ahead. On Monday, the Fed will release the latest Senior Loan Officers Opinion Survey (SLOOS). It is likely to show a further sharp tightening in lending standards, especially for commercial real estate loans (chart). The members of the FOMC had a copy of the SLOOS report at their meeting last week, but decided to raise the federal funds rate nonetheless. They may come to regret their last

Ed Yardeni

Keep Your Seatbelt on and Get a Neck Brace

May 5, 2023 2 min read paid

The S&P 500 rallied along with regional bank stocks today. It found support yesterday at its 50-day moving average. Shares of Western Alliance, Comerica, and Zions Bancorp were upgraded to the equivalent of a buy recommendation by analysts at JP Morgan. They said "with too many on one side of the boat, we move to the middle." Also giving the market a lift: Apple's

Ed Yardeni

No Boom, No Bust

May 4, 2023 2 min read paid

Our Boom-Bust Barometer (BBB) fell into an unprecedented abyss during the pandemic lockdown in early 2020 (chart). Our BBB is the ratio of the CRB raw industrials spot price index to initial unemployment claims on a weekly basis. It is a very useful high-frequency business cycle indicator. Like the Index of Coincident Economic Indicators (CEI), it tends to peak at the tail end of booms and to bottom at the

Ed Yardeni

Powell's Plateau

May 3, 2023 2 min read

The current consensus in the financial markets seems to be that the FOMC is done hiking the federal funds rate (FFR) after having raised it today by 25bps to 5.00%-5.25%. Furthermore, markets seem to be anticipating that the FFR will be falling soon. That's consistent with the widely held view that a recession is coming soon. It isn't consistent with Fed Chair Jerome

Ed Yardeni

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