Paid Will June's CPI Inflation Rate Be the Peak? Jul 12, 2022 1 min read paid June’s CPI will be out tomorrow. Bloomberg is showing consensus estimates of up 1.1% m/m (8.8% y/y) for the headline and 0.6% m/m (5.8% y/y) for the core inflation rates. Both y/y estimates are up from May’s rates of 8.6% and 6.0%. Ed Yardeni
Public Is the Bond Market Anticipating Peak Inflation? Jul 11, 2022 1 min read The 10-year US Treasury bond yield has recently stabilized around 3.00%. That calm reflects a remarkable increase in the comparable TIPS yield that has been offset by a drop in the expected-inflation component of the nominal yield. What's going on? Consider the following: (1) Until the past few weeks, the daily TIPS yield has been highly correlated with the monthly real bond yield, defined as the spread Ed Yardeni
Public Dr Ed's Video Webcast 7/11/22 Jul 11, 2022 1 min read Is a recession imminent? Is it here already? How big an impact will it have, if it comes, when it comes? Below is exclusive early access to Dr Ed's Webcast for paid members. This post and video will open to the public on a later date. The dreaded “R” word has everyone in a tither, and so does the weakness in the LEI. But the CEI suggests everything’ Ed Yardeni
Public The Economic Week Ahead 7/11/22 Jul 10, 2022 1 min read Inflation will be in focus on Wednesday, when June's CPI is released. Bloomberg is showing consensus estimates of up 1.1% (8.8% y/y) for the headline and 0.6% (5.8% y/y) for the core inflation rates. Such readings wouldn't clearly signal that inflation has peaked. There will be plenty of other inflation indicators this coming week: NY Fed's June survey Ed Yardeni
Paid S&P 500 Sectors: Latest Performance Jul 10, 2022 2 min read paid Will the Da Vinci Code be right again in calling a major market bottom? The S&P 500 fell to 666 on an intra-day basis on March 6, 2009. That devilish number marked the bottom in the previous bear market. On June 16 of this year, the S&P 500 closed at 3666, down 23.6% from its record high on January 3. That marked the bottom to Ed Yardeni
Public Gold Losing Its Shine Jul 9, 2022 1 min read Gold hasn't been a good hedge against inflation over the past highly inflationary year. That's not surprising since this precious metal's price is inversely correlated with the 10-year TIPS yield and with the trade-weighted dollar (charts below): (1) The TIPS yield fell to a record low of -1.19% on November 9, 2021. It then moved higher, especially this year, closing at 0.72% Ed Yardeni
Paid Goldilocks & the Fed Jul 8, 2022 1 min read paid Was today’s June employment release a Goldilocks report? Payroll employment rose 372,000, and wages increased 0.3%—not too hot, not too cold. The problem is that consumer prices have been rising faster than wages for the past year or so. As a result, the purchasing power of our Earned Income Proxy for private wages and salaries in personal income has been significantly eroded by higher prices (chart) Ed Yardeni
Public S&P 500 Energy Earnings Still Energetic Jul 8, 2022 1 min read The S&P 500 Energy sector has been weak recently, but it is still the only one of the index's 11 sectors with a gain so far this year at 28.0% ytd. Here are a few quick takeaways: (1) The price of a barrel of Brent crude oil has been volatile around $100 recently and looking toppy. The outlook has become extremely controversial. On July 1, Ed Yardeni
Paid Chips Are Cheap Again Jul 7, 2022 1 min read paid One of the worst performing S&P 500 industries so far this year has been Semiconductors. It is down 36.9% ytd as its forward P/E dropped 44% from 25.0 to 14.0. Meanwhile forward earnings rose 13.1% ytd to a record high. (See our "Blue Angels" chart below). Ed Yardeni
Public Recession: To Be Or Not To Be? Jul 6, 2022 2 min read The latest batch of leading economic indicators suggests that several coincident economic indicators might soon begin to fall. So we now place the odds of a mild recession at 55% (up from 45%), making it our base-case outlook. Let’s review what we have so far for June’s Index of Leading Economic Indicators (LEI) and May's Index of Coincident Economic Indicators (CEI): (1) While it is widely Ed Yardeni
Paid Is the Labor Shortage Depressing the Economy? Jul 6, 2022 1 min read paid Might this be the first economic downturn attributable to a labor shortage? That shortage is weighing on output. It is also driving up wages, but the resulting wage-price spiral is eroding consumers' purchasing power as prices are rising as fast as wages. The solution is productivity, but it remained very weak during H1-2022. Consider the following: (1) Today's JOLTS report showed 11.3 million job openings, or Ed Yardeni
Public The MegaCap-8’s Impact on the S&P 500 Jul 5, 2022 2 min read The MegaCap-8 stocks were also the Magnificent-8 during 2020 and most of 2021. Their businesses greatly boomed during the pandemic when many people worked, schooled, and entertained at home. The MegaCap-8 include Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, NVIDIA, and Tesla. During H1-2022, they lost a lot of their magnificence and market capitalization, and weighed heavily on the S&P 500. Let’s review their rise and fall: (1) Ed Yardeni