Yardeni QuickTakes (Page 152)

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

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%

Ed Yardeni

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

Ed Yardeni

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

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

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

Ed Yardeni

Mortgage Applications Falling, Consumer Credit Balances Rising

Jun 8, 2022 1 min read paid

The housing market may be falling into a recession, but consumers continue to spend—though they have needed to borrow more to do so. The seasonally adjusted purchase Index for mortgage applications, compiled by the Mortgage Bankers Association, decreased 7% w/w and 21% y/y during the week ended June 3. Record-high home prices combined with this year’s spike in the mortgage rate to 5.40% have

Ed Yardeni

Leading Indicators Up, GDP Revision Down

Jun 7, 2022 2 min read paid

We have a mix of good and bad news this morning for you. We will start with the good news: Two of our favorite leading economic indicators—i.e., payroll employment in truck transportation and in temporary help services—rose to new record highs during May, according to Friday’s employment report (charts below). Both are highly correlated with the Index of Leading Economic Indicators, which is available through April.

Ed Yardeni

Tracking Equity Flows

Jun 6, 2022 1 min read

The stock market’s been dropping, but who is selling stocks? Is the stock market so illiquid that just $48.4 billion in net outflows from equity mutual funds and exchange-traded funds (ETFs) during April caused April’s steep 8.8% drop in the S&P 500? The S&P 500 also fell sharply during the first three months of this year, by 4.9%, but there

Ed Yardeni

Dr Ed's Weekly Webinar 6/6/22

Jun 6, 2022 1 min read

As analysts’ earnings estimates have scaled new heights this year, investors have experienced valuation altitude sickness, which may soon be resolved by the drop in P/Es since the start of the year. Or it may resolve in a much more sickening fashion if a recession sends earnings expectations—and valuations—hurtling downward. …. Below is exclusive early access to Dr Ed's Weekly Webinar for paid members. This post

Ed Yardeni

Quantitative Tightening Begins

Jun 5, 2022 1 min read paid

In recent conversations with our accounts, we have been hearing more concern about the Fed’s second round of quantitative tightening (QT2), which started this month. QT1, which lasted from October 1, 2017 to July 31, 2019, pared the Fed’s balance sheet by $675 billion. Under QT2, the Fed will reduce its balance sheet by running off maturing securities. From June through August, that will involve dropping its holdings

Ed Yardeni

The Economic Week Ahead 6/6/2022

Jun 4, 2022 1 min read

On June 1, JPMorgan Chase CEO Jamie Dimon said that “fiscal stimulation is still in the pocketbooks of consumers. They are spending it.” We agree: Consumers have about $1 trillion in excess saving thanks to the government’s pandemic relief checks that weren’t spent. They’ve been dipping into that pool of money to offset the weakness in the purchasing power of their paychecks, which have been eroded by

Ed Yardeni

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