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Market Call: Another Rollercoaster Ride.

Jun 2, 2024 3 min read paid

Friday was another wild ride on the S&P 500 rollercoaster. At first, stock prices rose after April's PCED inflation rate released at 8:30 am matched expectations. But then they dropped after a recessionary reading in May's Chicago Purchasing Managers Business Barometer at 10:00 am (chart). The unexpected decrease in the business barometer partly reflected a steep drop in the new orders index,

Ed Yardeni

DEEP DIVE: US Economy Is Less Interest Rate Sensitive

May 31, 2024 6 min read paid

US Economy I. Banks Versus Nonbanks. The resilience of the US economy has been impressive over the past two years in the face of the Fed’s dramatic tightening of monetary policy. Nevertheless, there are still a few hardcore hard-landers predicting that the economy either is already in a recession or soon will be. They’re convinced that there are long and variable lags between restrictive monetary policy and its

Ed Yardeni
Eric Wallerstein

Housing Still In Rolling Recession

May 30, 2024 2 min read paid

Ed Yardeni

Bonds Weighing On Stocks

May 29, 2024 2 min read paid

Yesterday, Minneapolis Fed President Neel Kashkari told CNBC that he wants to see "many more months of positive inflation data" before he's ready to cut rates. He also didn't rule out a hike. Fixed-income investors are starting to realize that this is the new party line from the Fed. Earlier this year, we argued that there was no reason for the Fed to rush

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 5/29/24

May 29, 2024 1 min read paid

Geopolitical events can shake up the stock market, sometimes providing buying opportunities. The current geopolitical landscape is unsettled and unsettling, with potentially seismic ramifications on several fronts and lots of uncertainties: Is Putin’s call for negotiations with Ukraine a nonstarter? Is it even real? Are US efforts at brokering peace in the Middle East progressing toward that end or is that notion wishful thinking? Does the heightened pitch of

Ed Yardeni
Eric Wallerstein

Sunny Economy, Gloomy Dispositions

May 28, 2024 2 min read paid

Inflation is the number one economic concern among consumers today. It's also moderated significantly since the summer of 2022; the prices of durable goods are even deflating a bit. The labor market remains strong, boosting consumer spending. Stocks are at all-time highs. Yet, according to a recently released Fed survey, only 22% of Americans think the US economy is in good or excellent shape, down from 50% before

Ed Yardeni
Eric Wallerstein

Market Call: The Magnificent One?

May 27, 2024 2 min read paid

Stock market pundits have been bemoaning the narrowness of the current bull market that started on October 12, 2022. It has been led by the Magnificent-7. Now the pundits are fretting that it is being led by just Nvidia, which is up 115.0% ytd versus 11.2% for the S&P 500 (chart). It is also significantly outperforming the Magnificent-6 so far this year. Nvidia is the only

Ed Yardeni

The Economic Week Ahead: May 28 - 31

May 27, 2024 3 min read

The economic indicators released during the shortened week ahead should confirm that economic growth remains solid and that inflation is continuing to moderate. Here's what we're watching this week: (1) PCED. The Cleveland Fed’s Inflation Nowcasting model shows headline and core PCED rose 2.68% and 2.74% y/y (0.27% and 0.23% m/m) last month (chart). That would be the lowest

Ed Yardeni
Eric Wallerstein

DEEP DIVE: Dow 40,000 And Counting

May 24, 2024 4 min read paid

The Baby Boomers have been heavily influenced by a couple of Spocks—Dr. Benjamin Spock and Spock of Star Trek, played by Leonard Nimoy. Dr. Spock was a pediatrician who wrote Baby and Child Care (1946). It became the unofficial bible of child rearing as millions of mothers read it and raised their Baby Boom children according to the book’s advice. In the 1960s and 1970s, conservatives blamed Dr.

Ed Yardeni
Eric Wallerstein

Will Nvidia Trump The Fed?

May 23, 2024 2 min read paid

Yesterday's FOMC minutes confirmed that Fed officials are in no rush to lower the federal funds rate (FFR) and some are considering the possibility that they might have to raise it if inflation stalls above the Fed's 2.0% target. The 2-year Treasury yield is back up to 4.94% implying one 25bps rate cut over the next 12 months. So stocks sold off on fears

Ed Yardeni
Eric Wallerstein

Dow 60,000: Here We Come

May 22, 2024 3 min read

The Dow Jones Industrial Average closed above 40,000 for the first time on Friday, May 17 (chart). Today it is back down slightly below this level. We hope the title of this QT doesn't turn out to be a jinx, but we are still aiming for Dow 60,000 by 2030 in our Roaring 2020s scenario. Along the way, there could be corrections and even another bear

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 5/22/24

May 22, 2024 1 min read paid

Boomer-led households’ collective net worth has skyrocketed 19-fold since 1990. As the generation has lived long and prospered, so has the stock market (rising 40-fold over their adulthood) and the US economy (with nominal GDP up eightfold since 1982). Looking ahead, our Roaring 2020s scenario assumes faster-than-average growth for S&P 500 earnings, GDP, and productivity. Faster productivity growth should depress unit labor costs and inflation in a process

Ed Yardeni