Public A Couple of Bullish Bond Market Indicators Jun 21, 2022 2 min read Is the bond yield heading higher or lower? It should be heading higher given that it remains well below the rate of inflation. That’s unless investors believe that inflation is more likely to move lower than higher over the next few years if not in the immediate future. In any event, two useful bond market indicators are currently bullish for bonds and offer some hope for stocks too: (1) Ed Yardeni
Paid DEEP DIVE: Revisiting Venus and Mars Jun 21, 2022 3 min read paid This is an excerpt from our June 21, 2022 Morning Briefing. Strategy I: Investors Are Still from Mars. Our May 18 Morning Briefing was titled “Analysts Are from Venus; Investors Are from Mars.” We wrote: “Stock market investors seem to believe that industry analysts are becoming increasingly delusional. The latter have been raising their revenues and earnings estimates since the start of the year, while the former have been cutting Ed Yardeni
Public The Economic Week Ahead 6/21/22 Jun 20, 2022 1 min read The week ahead is a short one for the financial markets, and it is a light one for US economic indicators. But that doesn’t mean it will be a quiet week for the markets, since we live in volatile times. May data for existing home sales (to be released on Tuesday) and new home sales (on Friday) are likely to show that the housing market is falling deeper into Ed Yardeni
Paid The Best Cure for High Commodity Prices Jun 20, 2022 1 min read paid In the commodity pits, traders often say: "The best cure for high commodity prices is high commodity prices." That's because when a commodity price soars, it depresses demand for the commodity and stimulates the supply of it. History shows that an even better cure for high commodity prices is a recession. During the late phase of economic expansions, the economy tends to boom. That drives up Ed Yardeni
Public Well Below the 200-Day Moving Average Jun 19, 2022 1 min read Some widely followed technical and sentiment indicators suggest that the stock market is oversold and due for a rally. Consider the following: (1) The S&P 500 was extremely overbought last year. Around mid-year 2021, more than 90% of the stocks in the index were trading above their 200-day moving averages (dma). There has been a significant reversal of fortune since then with only 11.3% of the S& Ed Yardeni
Paid In the Event of Motion Sickness Jun 19, 2022 1 min read paid Below is the front cover of the latest Bloomberg Businessweek. It should be a very bullish contrary indicator for the stock market. In recent months, there have been plenty of signs of mounting bearish sentiment, which should be bullish from a contrarian perspective. However, fighting the Fed when the Fed is fighting inflation is not a good idea whether one is a contrarian or not. We still expect to see Ed Yardeni
Paid No Letup in the Valuation Meltdown Jun 18, 2022 1 min read paid The S&P 500’s forward P/E fell to 15.4 on Friday from just over 20.0 at the start of this year. That’s around the historical average for this valuation multiple. Lower readings typically have been associated with bear markets and recessions. The index fell into a bear market on Monday, but the jury is out on the recession call. Ed Yardeni
Public A Horrible Week Even for Energy Jun 18, 2022 1 min read This was one of the worst weeks in one of the worst years, so far, for the stock market. Of the 100+ industries that we track in the S&P 500, only one was up, namely, Air Freight & Logistics. All the rest were down with more than half exceeding the 5.8% decline of the S&P 500. Keep in mind that the S&P 500 Ed Yardeni
Paid US Production and LEI Signaling Softish Landing Jun 17, 2022 2 min read paid There was a tiny hint of a manufacturing recession in May's industrial production index, which was reported today. It is one of the four components of the Index of Coincident Economic indicators (CEI). May's Index of Leading Economic Indicators (LEI), also reported today, is signaling slower economic growth ahead as well: (1) The LEI, which remains near its recent record high, fell in May by 0. Ed Yardeni
Public David Bowie and S&P 500 Earnings Jun 16, 2022 2 min read Ground control to Major Tom: "Have you heard that the US economy is falling into a recession?" Like David Bowie's astronaut, S&P 500 industry analysts seem to be in outer space. Their earnings estimates are certainly out there still: (1) Our Squiggles analysis (below) shows that through the week of June 9, the S&P 500 consensus revenues estimates for 2022 and 2023 Ed Yardeni
Paid Two Regional Business Surveys Showing More Stagflation In June Jun 16, 2022 2 min read paid Two regional business surveys, conducted by five of the 12 Federal Reserve Banks, are now available for the New York and Philadelphia districts through June. These two always come out before the other three for Kansas City, Richmond, and Dallas. They also tend to reflect the average final results of all five surveys. The averages of both the two surveys and all five of them closely track the national manufacturing Ed Yardeni
Public May's Retail Sales Depressed Q2's Real GDP Jun 16, 2022 2 min read May's retail sales was weak in current dollars (-0.3% m/m) and even weaker in real dollars (-1.6%). The question is whether consumers have more than satisfied their post-lockdown, pent-up demand for goods, and are now spending more on services? Consider the following: (1) The three rounds of stimulus checks provided by Uncle Sam (actually Uncles Don and Joe) during the pandemic certainly stimulated retail sales. Ed Yardeni