Archive

More Investors Move To Correction Camp

Aug 23, 2023 1 min read paid

Investors Intelligence reported that their Bull/Bear Ratio was 2.38 this past week, remaining below the recent peak of 3.01 during the July 18 week (chart). Sentiment has been more cautious since Fitch Ratings downgraded US government debt on August 1 causing the 10-year Treasury bond yield to rise back above 4.00%, peaking at 4.36% yesterday morning The yield was back down to 4.23% this

Ed Yardeni

Oil Is Well

Aug 22, 2023 2 min read paid

Reuters reported today that the major US oil and gas producers spent more on payouts to shareholders last year than on exploration and development, according to an Ernst & Young report. By reducing capital spending, the industry is reducing its costs, contributing to upward pressure on oil and gas prices, and increasing its dividends and buybacks as profits swell. Of course, plenty of other factors are influencing prices as well.

Ed Yardeni

Bond Yield Returning To Normal

Aug 21, 2023 2 min read paid

The 10-year US Treasury bond yield continued to rise today, yet stock prices rallied led by the MegaCap-8 stocks. The bond yield is returning to the levels seen prior to the period spanning the Great Financial Crisis (GFC) through the Great Virus Crisis (GVC) when the Fed kept interest rates abnormally low. And the stock market might be OK with bond yields returning to their old normal. Nevertheless, there might

Ed Yardeni

Market Call: "No, Mr. Bond, I Expect You To Die!"

Aug 20, 2023 3 min read paid

Does the Fed really want to see the yield curve "disinvert" with the 10-year Treasury bond yield (currently 4.26%) rising up to the 2-year Treasury note yield (currently 4.92%) (chart)? We will find out on Friday, when Fed Chair Jerome Powell speaks at the Fed's annual Jackson Hole conference. If Powell wants to calm the bond market down, he should acknowledge that inflation has

Ed Yardeni

The Economic Week Ahead: August 21-25

Aug 19, 2023 2 min read paid

Ed Yardeni

Bond Prices Go Drip, Drip, Drip

Aug 17, 2023 2 min read paid

The 10-year US Treasury bond yield rose above 4.00% at the beginning of August on better-than-expected economic data. It rose above last year's peak of 4.25% today, trading most recently at 4.32%, following the release yesterday of July's FOMC minutes, which strongly suggested that solid economic growth might keep inflation above the Fed's 2.0% target unless the Fed continues to

Ed Yardeni

China: Desperately Seeking a New Engine

Aug 16, 2023 2 min read paid

The Chinese are providing American consumers with cheaper goods. By doing so, the Chinese are increasing the purchasing power of American consumers, who are doing what they do best; they are shopping. It’s a gain for the US economy, which is getting better economic growth with lower inflation. It’s a loss for Chinese consumers, who are facing deflation and higher unemployment and dealing with the consequences of the

Ed Yardeni

Upside Surprises

Aug 16, 2023 2 min read paid

The economy isn't landing; it's flying high. Following better-than-expected July reports for housing starts and industrial production this morning, the Atlanta Fed's GDPNow tracking model raised Q3's real GDP growth rate to 5.8% (saar) from 5.0%, after raising it from 4.1% yesterday on a better-than-expected July retail sales report (chart). Consumer spending and residential investment are now tracking at

Ed Yardeni

Dr Ed's Video Webcast 8/16/23

Aug 16, 2023 1 min read paid

Is the federal budget deficit getting too big for the bond market to fund without yields moving higher? That seems to be a growing concern in both the bond and stock markets. In the past, bond yields were determined mostly by the Fed’s response to inflation, which is moderating; supply and demand didn’t matter much, but they may now. Today, we examine why this period of deficit widening

Ed Yardeni

For the Bulls, The Suspense Is Hard to Bear

Aug 15, 2023 2 min read members

The Bond Vigilantes kept the suspense going today. They closed the 10-year Treasury bond yield at 4.22% (chart). It's widely feared that if it rises above 4.25% (i.e., last year's high), the next stop could be 4.50% and even 5.00% if the yield curve disinverts with the long end rising up to meet the short end. The stock market has been

Ed Yardeni

Bond Vigilantes Running Into Some Resistance

Aug 14, 2023 2 min read paid

The 10-year US Treasury bond yield continues to run into resistance around 4.25%, which was last year's high (chart). The bond bears led by the Bond Vigilantes would like to see the yield rise well above that level to demonstrate that they are unhappy with the government's profligate fiscal policies. The bond bulls--including us, for now--see the current level as an attractive one if inflation

Ed Yardeni

Market Call: The Bond Vigilantes Are Saddling Up

Aug 13, 2023 3 min read paid

As we anticipated, the S&P 500 has dropped to its 50-day moving average (dma) on Friday (chart). It is down 2.7% from its bull market high of 4588.96 on July 31. Leading the way down has been the S&P 500 Information Technology sector (-7.0%). Weighing on this sector's valuation multiple has been the jump in the 10-year Treasury yield above 4.

Ed Yardeni