Archive

DEEP DIVE: Captain America!

Nov 10, 2023 5 min read paid

US Economy: Superhero. Like Captain America, the American economy seems to have an indestructible shield. The Fed has raised the federal funds rate aggressively by 525bps since March 2022 with the aim of tightening financial conditions to slow the economy and to raise the unemployment rate with the ultimate aim of bringing down price and wage inflation (Fig. 1 below). Yet real GDP jumped 4.9% (saar) and rose 2.

Ed Yardeni

Powell Is Still Calling The Shots

Nov 9, 2023 2 min read paid

The bid-to-cover ratio is the dollar value of bids compared with the dollar value of debt offered. Falling bid-to-cover ratios indicate less robust interest from investors. Yields climbed today after a weak auction of $24 billion in 30-year Treasuries with demand for the debt at 2.24 times the bonds on sale (chart). That helped to push stock prices lower today, snapping the longest winning streaks for the Nasdaq and

Ed Yardeni

Weakening Global Economic Growth Is A Mixed Bowl Of Nuts

Nov 8, 2023 2 min read paid

We are still aiming for 4600 on the S&P 500 before the end of this year. That's only a 5.0% increase from today's close. Heck, the S&P 500 was up 5.9% just last week. However, that was clearly a combination of a short-covering rally in both the bond and stock markets. It was also a buying panic in the bond

Ed Yardeni

Dr Ed's Video Webcast 11/8/23

Nov 8, 2023 1 min read paid

Last week brought epic rallies in both the stock and bond markets. We think the stock market’s correction is over and that the S&P 500 is back on track to end the year at 4600. All 11 sectors gained ground last week, many enjoying their best week in nearly a year. As for the bond market rally that carried the 10-year Treasury bond yield down to a

Ed Yardeni

Oil's Slippery Slope

Nov 7, 2023 2 min read paid

The NYMEX nearby futures price of a barrel of crude oil peaked this year at $93.68 on September 27. Notwithstanding the war that started between Israel and Hamas on October 7, the price is down $16.27 from that peak to $77.42. That’s even though Saudi Arabia and Russia reduced their exports during the summer and maintained their cuts through yearend. One reason for this development is

Ed Yardeni
Eric Wallerstein

SLOOS Shows Looser Credit Conditions

Nov 6, 2023 1 min read

The Fed may not be as almighty as Fed officials believe. The FOMC has raised the federal funds rate aggressively by 525bps since March 2022. Their goal was to slow economic growth to subdue inflation. Yet the economy grew rapidly during Q3 and the unemployment rate has remained below 4.0% since February 2022. Nevertheless, inflation has moderated significantly since last summer (chart). Inflation seems to be to be mostly

Ed Yardeni

Market Call: Spotting Reindeers

Nov 5, 2023 2 min read paid

Last week was a wild one for sure in the bond and stock markets. The bond yield plunged and stock prices soared led by SMidCaps and interest-rate sensitive sectors and industries. Fears that the bond yield might continue to surge above 5.00% evaporated in response to weaker-than-expected employment indicators and a broadening consensus that the Fed is done raising the federal funds rate. The bond yield plunged 41bps from

Ed Yardeni

The Economic Week Ahead: November 6 - 10

Nov 4, 2023 2 min read paid

It's a light week for US economic indicators. However, the FOMC's blackout period is over, so there should be lots of erudite remarks coming from the members of the Federal Open Mouth Committee. They are likely to be less hawkish following last week's batch of somewhat weak economic indicators--though the batch wasn't weak enough to cause more than a tiny decline in

Ed Yardeni

DEEP DIVE: Inflation - Beware of the Devil in the Details

Nov 3, 2023 2 min read paid

Investors have been spooked by inflation since Halloween 2021 as the CPI soared to peak at 9.1% during June 2022. It was down to 3.7% during September of this year. Yet investors are still spooked, fearing that inflation will remain stuck above the Fed’s 2.0% target or will rebound as it did during the 1970s. Consider the following: (1/4) We’ve recently observed that the

Ed Yardeni

Dr Ed's Video Webcast 11/1/23

Nov 2, 2023 1 min read paid

We recently raised our subjective odds of a US recession before year-end 2024 from 25% to 35% mostly because the geopolitical risks continue to escalate. We see two potential scenarios that could result in a recession, but they don’t warrant raising our recession odds at this time. The US economy remains resilient; we review recent areas of strength. Also: Further escalation of war in the Middle East could bring

Ed Yardeni

Productivity Is Making A Comeback!

Nov 2, 2023 2 min read

Today's bond and stock rallies was boosted by Q3's Productivity and Costs report released at 8:30 am. It confirms our view that strong economic growth isn't inflationary if it is driven by productivity growth. Fed officials have been trying to slow the economy down to subdue inflation. Our analysis suggests that they should allow productivity-led growth to flourish because it is the main

Ed Yardeni

Halloween Is Over. Is Santa Here Already?

Nov 1, 2023 2 min read paid

It's possible that the S&P 500 bottomed today. Bond King Jeffrey Gundlach appeared on CNBC following Fed Chair Jerome Powell's presser and opined that the entire yield curve looked attractive, at least for a trade. We agree. He also observed that the S&P 500 might have found support at its uptrend line connecting the lows of March 23, 2020 and October 12,

Ed Yardeni