Paid Bull/Bear Ratio Remains Under 1.0 Jun 15, 2022 2 min read paid The Bull/Bear Ratio (BBR) remains bearish. It has been bouncing around 1.00 since late February. During the bull market from March 9, 2009 through January 3, 2022, a reading of 1.00 or less turned out to be a very good short-term and long-term buy signal from a contrarian perspective. That’s when investors could count on the Fed Put to save the day. That’s no longer Ed Yardeni
Public Small Business Owners Depressed But Still Hiring Jun 14, 2022 1 min read Inflation is depressing, and it is depressing everyone—including consumers, business people, and investors in stocks and bonds. For example, consider May’s survey of small business owners conducted by the National Federation of Independent Business (NFIB): (1) Owners expecting better business conditions over the next six months decreased four points to a net negative 54%, the lowest level recorded in the history of the 48-year-old survey! (2) Inflation was Ed Yardeni
Public It’s Officially a Bear Market Jun 14, 2022 2 min read On Monday, the latest S&P 500 correction morphed into a bear market when the index closed down more than 20.0%—specifically 21.8%—below its record-high close on January 3, 2022. Over this period, the S&P 500 forward P/E plunged 26.6% from 21.4 to 15.7 even as forward earnings (i.e., the time-weighted average of analysts’ earnings estimates for 2022 and Ed Yardeni
Paid Stay Home vs. Go Global Jun 13, 2022 1 min read paid The Stay Home investment strategy is underperforming the Go Global alternative so far this year in local currencies. On the other hand, the ratio of the US MSCI to the All Country World (ACW) ex-US MSCI in dollars (rather than local currencies) remains on a solid upward trend (charts below). Ed Yardeni
Public Dr Ed's Video Webcast 6/13/22 Jun 13, 2022 1 min read In today's Webcast: May’s CPI report showed scant signs of inflation peaking, though we still expect peaking soon. The report also suggests a more hawkish Fed and higher recession risk. We’re raising our odds of a mild recession to 45% from 40%. Below is exclusive early access to Dr Ed's Webcast for paid Members. This post and video will open to the public on Ed Yardeni
Public Uncle Sam Isn’t Santa Claus Jun 12, 2022 1 min read Following Friday’s CPI shocker, the financial media seem to have concluded that the Fed will have no choice but to raise the federal funds rate faster than planned to bring inflation down—causing a recession. The Fed is now expected to raise the federal funds rate on Wednesday by 75bps rather than 50bps. The two-year Treasury note soared 23bps on Friday to 3.06%, implying investor expectations that the Ed Yardeni
Paid The Economic Week Ahead 6/13/22 Jun 11, 2022 1 min read paid A whole bunch of economic indicators to be released this coming week are likely to confirm that the economy is struggling with stagflation—i.e., high inflation with slow economic growth: (1) On the inflation front, May’s PPI will be out on Tuesday. That same day, the NFIB survey of small business owners will include data on the percentage raising their prices last month. The same goes for June’ Ed Yardeni
Public CPI Unnerves Investors Jun 10, 2022 1 min read This past week was an ugly one for the S&P 500 adding significantly (5.1ppts) to the 18.2% ytd loss in the index. The MegaCap-8 stocks continued to weigh most heavily on the S&P 500 Information Technology, Communication Services, and Consumer Discretionary sectors. Here is the ytd and past week's performance derby for the index and its 11 sectors: Energy (58.7%, -0. Ed Yardeni
Public Protracted Inflation Jun 10, 2022 2 min read Inflation is no longer transitory or persistent. It is protracted. The headline and core CPI inflation rates have yet to peak because rapidly rising energy prices continue to put upward pressure on the headline rate directly and on the core rate indirectly by boosting energy-related costs like transportation. The headline and core rates for May were 8.6% y/y and 6.0% y/y. Here are a few quick Ed Yardeni
Paid More Central Bank Tightening Jun 9, 2022 1 min read paid Don't fight the central banks when they are fighting inflation. Stock prices dropped today on news that the European Central Bank will end quantitative easing on July 1, then raise interest rates by 25bps on July 21. It will then hike again on September 8. At -0.5%, the ECB's deposit rate has been in negative territory since 2014. Unlike the Fed, the ECB remains committed Ed Yardeni
Paid S&P 500 Industry Analysts Giving Earnings Mixed Reviews Jun 9, 2022 1 min read paid While many industry analysts remain optimistic about the earnings outlook for the S&P 500 industries they cover, some of them are turning more cautious. We can see this in the following table which shows the ytd performance of forward earnings through the June 2 week. The following are our main quick takes: (1) Here is the ytd performance derby of the forward earnings for the S&P Ed Yardeni
Public Bull/Bear Ratio Remains Low Jun 8, 2022 1 min read Stock market sentiment remains bearish, which is bullish for longer-term investors with a contrarian streak. Consider the following: (1) Investors Intelligence Bull/Bear Ratio (BBR) was below 1.00 for the sixth successive week this week—slipping to 0.89 this week, after climbing the prior two weeks from 0.65 (the lowest since mid-February 2016) to 0.93 over the period. The BBR has been bouncing around 1.00 Ed Yardeni