Archive

Dr Ed's Video Webcast 7/12/23

Jul 12, 2023 1 min read paid

June’s newly released employment report gives us clues about June’s not-yet-released CEI, and the CEI closely tracks GDP. So from the employment report, we extrapolate that June’s CEI will likely confirm that real GDP grew around 2.0% y/y during Q2, close to the Atlanta Fed’s current prediction (2.1%). A recession is still possible if the Fed keeps tightening, but we see just a

Ed Yardeni

Q2 Earnings Reporting Season Starts With the Big Banks

Jul 11, 2023 2 min read paid

The Q2 earnings season starts off this week with the major banks reporting their results. Based on weekly data provided by the Fed, we know that loans and leases at the large domestic banks rose modestly by 3.0% y/y through the end of June (chart). There's no sign of a credit crunch so far following March's banking crisis, which was quickly contained by the

Ed Yardeni

Sunny Day

Jul 10, 2023 1 min read paid

Today was a sunny day for stocks and bonds following a few stormy days. That's even though two Federal Reserve district bank presidents (Daly & Mester) said that inflation remains too high and more rate hikes will probably be necessary to bring it down. On the other hand, another one of them (Bostic) said the Fed's "policy right now is clearly in the restrictive territory.

Ed Yardeni

Market Call: Bullish Channel

Jul 9, 2023 2 min read paid

The current bull market started on October 12 when the S&P 500 bottomed at 3577.03 (chart). It rose 24.6% reaching a high of 4455.59 on July 3. So far it is down only 1.3% through Friday's close. It seems to have found resistance at the upper end of the bull market's channel. If so, then it might fall back down

Jackie Doherty

The Economic Week Ahead: July 10-14

Jul 8, 2023 2 min read

This week is jampacked with June's inflation indicators. On balance, they should show that inflation continues to moderate. On Monday, the FRBNY survey of consumer inflationary expectations should decline from May's 4.1% for the one-year-ahead and 3.0% for the three-years-ahead readings. The price of gasoline has a big impact on these expectations, and it was down 26.5% y/y during the four weeks

Ed Yardeni

DEEP DIVE: The Worry List

Jul 8, 2023 4 min read paid

Economists who are still forecasting a recession typically offer four reasons. First is the inversion of the yield curve. Second is the drop in M2. Third is the significant tightening of monetary policy resulting from the increase in the federal funds rate combined with quantitative tightening (QT). Fourth is that consumers’ excess saving accumulated during the pandemic could run out as soon as September. A more immediate risk to the

Ed Yardeni

Hot Job Reports Hit Stocks & Bonds Like A Bucket Of Cold Water

Jul 6, 2023 2 min read paid

The job market is still hot despite the 500bps increase in the federal funds rate since March of last year. Today's batch of strong labor market reports turned investors cold on stocks and bonds. Good news for workers is bad news for financial markets if it means that the Fed will continue to raise interest rates. In addition, it gives hard-landers another spin: The economy may be strong

Ed Yardeni

Dr Ed's Video Webcast 7/6/23

Jul 6, 2023 1 min read paid

Instead of the economywide recession that was widely expected to result from the Fed’s monetary tightening, recessionary weakness rolled through different areas of the economy at different times. Now that rolling recession is turning into a rolling recovery. Accordingly, we’re raising our Q2 real GDP forecast from 1.0% to 2.0%, followed by 2.0% in Q3 and Q4. We now see a 75% chance of a

Ed Yardeni

Both Analysts & Investors Are Optimistic

Jul 5, 2023 2 min read paid

In the stock market equation P = P/E x E, the consensus expected forward earnings of industry analysts determines earnings (E), while investors determine the forward earnings multiple (P/E) that they are willing to pay for E. Industry analysts remain optimistic on S&P 500 forward revenues which rose to another record high during the June 29 week (chart). They've also stopped lowering their consensus expectations

Ed Yardeni

Running of the Bulls

Jul 5, 2023 1 min read paid

Are there too many bulls? The Bull/Bear Ratio (BBR) compiled by Investors Intelligence jumped to 3.00 during the July 4 week, up from 2.69 the previous week (chart). It is the highest reading since the bull run from March 23, 2020 through January 3, 2022. The bull then got gored during the bear market through October 12, 2022. During the latest week, the bullish percentage rose to

Ed Yardeni

Construction Is Booming Despite Housing Recession

Jul 3, 2023 1 min read paid

The single-family housing market has been in a recession since early 2022. Housing is among the most interest-rate sensitive sectors of the economy. It tends to go down first when the Fed is raising interest rates, setting the stage for a broader economy-wide recession. So far, it's been different this time. Total construction--including residential, nonresidential, and public--rose to yet another record high in May (chart). That's

Ed Yardeni

Market Call: Melting Up?

Jul 2, 2023 2 min read paid

Growing confidence in the resilience of the economy has been one of the main reasons why the stock market has been so strong since October 12, with the S&P 500 up 24.4%, the Nasdaq up 32.4%, and the S&P 500 Transportation index up 21.0% since that date. On Friday, the S&P 500 closed up 1.22% at 4450.38 (chart). That&

Ed Yardeni