Archive

Market Call: Bad Breadth Again

Jun 23, 2024 3 min read

The stock market has a bad breadth problem again. For a while, it seemed to be attributable to the outperformance of the Magnificent-7. Many other stocks performed well, but not as well as the Mag-7. More recently, the outperformance seems to be narrowing to the Magnificent One, i.e., Nvidia (chart). Technical analysts are warning that this development increases the risks of a selloff in the market led by technology

Ed Yardeni

DEEP DIVE: Winning Streaks Usually Don't Last Forever

Jun 21, 2024 10 min read paid

TAMED I: Technical Analysis Of Macro Economic Data. Over the past two years, the hard landers had innumerable theories and charts to explain why higher interest rates would undoubtedly plunge the economy into a recession. Now, the diehard hard landers are again insisting that their long-held recession call will be proven correct soon. Others among them say we’re already in a recession. So far, these forecasts have been wrong.

Ed Yardeni
Eric Wallerstein

Multi-Family Housing Glut?

Jun 20, 2024 2 min read paid

Today's batch of economic indicators was on the weak side. Indeed, the Citigroup Economic Surprise Index fell deeper into negative territory today (chart). Does this suggest that the odds of a recession are increasing? Nope: The Atlanta Fed's GDPNow tracking model is now projecting 3.0% real growth in Q2, down from 3.1% on June 18. The stock market held its ground: The S&

Ed Yardeni
Eric Wallerstein

Stock Market Meltup: Earnings-Led Or Valuation-Led?

Jun 19, 2024 2 min read paid

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 6/19/24

Jun 19, 2024 1 min read paid

The rates of unemployment and inflation aren’t always inversely correlated, as the Phillips Curve model posits. Historically, they have often been; in recent times, not so much. The problem with the model is that it doesn’t account for the effects of productivity growth on price inflation. … The high rates of goods inflation experienced after the pandemic proved to be transitory, as we had anticipated. Services inflation has been

Ed Yardeni
Eric Wallerstein

Consumers Consuming, Producers Producing & Treasury Borrowing

Jun 18, 2024 2 min read paid

May's retail sales, including food services, rose just 0.1% m/m, weaker than expected (chart). That's in current dollars. Adjusted for inflation, they were not as weak. CPI goods fell 0.1% m/m during May. So real retail sales, less food services, rose 0.3%. Much of the recent weakness in retail sales has been in housing-related merchandise since housing sales remain weak. Real

Ed Yardeni
Eric Wallerstein

Recession With Chinese Characteristics

Jun 17, 2024 2 min read paid

China’s May economic indicators were broadly negative, as evidenced by the recent weakness in Chinese stock prices as well as the price of copper, which is very sensitive to economic developments in China (chart). The bursting of China's property bubble continues to weigh on the economy despite the government's lame measures to support property prices. Weak home sales and property investment data sent Chinese real

Ed Yardeni
Eric Wallerstein

Market Call: Momentum Meltup, Blowoff Top, Or Both?

Jun 16, 2024 3 min read paid

Consumer price disinflation is raising expectations for a Fed rate cut, which is fueling a meltup in stock prices. This morning on CBS' "Face the Nation," Minneapolis Fed President Neel Kashkari said that a rate cut by year-end is a “reasonable prediction.” On Friday, the 10-year Treasury bond yield fell below 4.25% to 4.20%. The technical picture is signaling that it might continue to fall

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: June 17-21

Jun 16, 2024 3 min read paid

The economic week ahead will include lots of economic indicators, which on balance should show that the pace of economic activity improved during May. June's regional business surveys for the New York and Philly Fed districts will also be released. The BIG number should be initial unemployment claims. Here's our take: (1) Unemployment claims. Jobless claims (Thu) jumped over the past three weeks through the week

Ed Yardeni
Eric Wallerstein

DEEP DIVE: Inflation - Why the Long Face?

Jun 14, 2024 3 min read paid

Among the hottest topics at dinner tables and at corporate boardrooms tables across the country—not to mention election campaign offices—is inflation. The topic of inflation has heated up along with inflation itself but doesn’t seem to be cooling off along with it. The US economy contended with its first significant bout of price pressures since the 1980s after pandemic stimulus measures boosted demand in the face of

Ed Yardeni
Eric Wallerstein

Low Inflation Readings Stampede the Bulls

Jun 13, 2024 2 min read paid

On Wednesday, the Federal Open Market Committee (FOMC) warned markets to expect no more than one interest rate cut over the rest of this year. But the bulls are charging ahead anyway on May's lower-than-expected CPI and PPI inflation data yesterday and today. The 10-year US Treasury bond yield is down nearly 25bps since Monday's high to 4.24% (chart). The Nasdaq hit another record high

Ed Yardeni
Eric Wallerstein

Inflation Moderates & Stocks Soar As Fed Aims For One Rate Cut In 2024

Jun 12, 2024 2 min read paid

Hooray! The S&P 500 closed slightly above our yearend target of 5400 today (chart). The same thing happened to us last year: We were forecasting 4600 by the end of 2024 and got there by mid-year. The index closed around 4800 at the end of last year. So what do we do now? We’ll talk and write more about our 2025 and 2026 targets of 6000 and

Ed Yardeni