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Dr Ed's Video Webcast 6/12/24

Jun 12, 2024 1 min read paid

How the labor market is doing is critical to the Fed’s setting of monetary policy given its dual mandate to steer the economy away from both too-high unemployment and too-high inflation. But gauging how the labor market is doing can be a stumper: Two different employment indicators point in different directions. … Less ambivalent are the indicators of wage inflation: All point to continued moderation. … We believe the labor market

Ed Yardeni
Eric Wallerstein

Game Over For Birth/Death Adjustment?

Jun 11, 2024 2 min read paid

Some economists claim that recent nonfarm payroll gains are misleadingly strong and are masking the underlying weakness in the labor market. These die-hard hard-landers point to a wonky calculation by the Bureau of Labor Statistics (BLS), i.e., the Birth/Death Adjustment (B/D). The B/D Adjustment attempts to account for job gains attributable to new businesses and job losses due to business closures that don't show

Ed Yardeni
Eric Wallerstein

Bonds, Oil, Copper, Gold & The Dollar

Jun 10, 2024 3 min read

On a regular basis, we like to check on the correlations among the fixed income, commodity, and foreign currency markets. Here are a few of our observations: (1) Bonds. The 10-year US Treasury bond yield has normalized, fluctuating in a range roughly between 4.00% and 5.00% (chart). That's where it traded for a few years prior to the Great Financial Crisis. The same can be said

Ed Yardeni

Market Call: Blue Angels Flying High

Jun 9, 2024 2 min read paid

Our Blue Angels framework shows that the S&P 500 was back in record high territory last week as S&P 500 forward earnings rose to yet another record high (chart). Meanwhile, the S&P 500's forward P/E has been relatively steady just above 20.0 in recent weeks. The S&P 500's forward P/E with and without the MegaCap-8

Ed Yardeni

The Economic Week Ahead: June 10-14

Jun 9, 2024 3 min read paid

The economic week ahead will be dominated by the FOMC’s latest meeting (Wed) and May’s CPI report. The FOMC is widely expected to keep the federal funds rate (FFR) target range between 5.25% to 5.50% on Wednesday. The committee will also release its latest Summary of Economic Projections (SEP) showing the participants’ median forecasts for real GDP, the unemployment rate, the inflation rate, and the FFR.

Ed Yardeni
Eric Wallerstein

DEEP DIVE: Expecting Record S&P 500 Earnings Ahead

Jun 7, 2024 4 min read paid

Joe reports that the S&P 500 Q1 earnings reporting season is now 98% complete, with 490 companies having issued their results. The 10 companies left to report are: Lululemon Athletica, Bath & Body Works, Brown-Forman, Campbell Soup, J M Smucker, Dollar Tree, Kroger, Autodesk, Broadcom, and Hewlett Packard Enterprise Co. Whatever those 10 firms report shouldn’t significantly change the aggregate results of the 500 companies in the

Ed Yardeni
Eric Wallerstein

Will The Fed Join The Rate-Cutting Pack Of Central Banks?

Jun 6, 2024 2 min read

US stocks rose to record highs on Wednesday. European stocks did the same today after the ECB lowered its official interest rate to 3.75%, down from a record 4.00%, where it has been since September 2023 and the first cut since 2019. Leading the rate-cutting pack of the major central banks was the People's Bank of China, which lowered its prime rate last year on August

Ed Yardeni
Eric Wallerstein

Charging to New Highs

Jun 5, 2024 3 min read paid

The S&P 500 rose to yet another record high today, once again led by semiconductor stocks, in particular, by Nvidia (chart). The chipmaker just joined the $3 trillion dollar market-cap club along with Microsoft and Apple. The long line to buy the company's GPU chips keeps getting longer. It will have a 10-for-1 stock split on Friday. Perversely, the bulls are also charged up by the

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 6/5/24

Jun 5, 2024 1 min read paid

Our economic and S&P 500 forecasts are underpinned by our forecasts for corporate revenues, earnings, and profit margins. We often compare them to industry analysts’ consensus estimates for S&P 500 companies in aggregate and how they change over time in response to earnings reports. Today, we illustrate this process by showing how data from Q1’s earnings season have fed into our own annual and forward

Ed Yardeni

Is The Fed Put Back?

Jun 4, 2024 3 min read paid

The financial markets seem to believe that the Fed Put is back. The recent batch of weaker-than-expected economic indicators raised the number of expected 25bps cuts in the federal funds rate (FFR) from 2 to 3 over the next 12 months (chart). That's according to the basis-point spread between the 12-month FFR futures and the actual FFR divided by 25bps. Investors must be confident that inflation is getting

Ed Yardeni
Eric Wallerstein

Goods Economy Still On The Ropes

Jun 3, 2024 3 min read paid

A growth recession is still rolling through the goods sector. Real consumer spending on goods has been flat at a record high since early 2022. We expect that spending on services, technology, and onshoring will keep the economy growing. There's still no stagflation or recession in our forecast. Today's M-PMI report was weaker-than-expected. That followed Friday's weaker-than-expected personal income report with spending on goods

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: June 3-7

Jun 2, 2024 2 min read paid

This week, May's employment report (Fri) is likely to be the most important one. We expect the labor market cooled a bit last month, tempering wage growth but not signaling a looming employment-led recession. Less profit margin pressure from wage inflation should boost company earnings, while the solid jobs market should continue to fuel consumer spending. If so, that's bullish for stocks. Here’s what we’

Ed Yardeni
Eric Wallerstein