Archive

Rolling Expansion?

Jun 20, 2023 2 min read paid

What happens after a rolling recession? Perhaps a rolling expansion as the economic sectors that fell into a recession recover. Today's housing starts report for May was certainly strong. Housing starts jumped 21.6% to 1.63 million units (saar) last month from April's 1.34 million (chart). It was the largest percentage gain since October 2016. A survey on Monday showed the National Association of

Ed Yardeni

Market Call: Bulls Gaining Ground In Tug-of-War With Bears

Jun 19, 2023 3 min read paid

The bulls continue to gain ground in our tug-of-war with the bears. Consider the following: (1) The S&P 500 is now up 23.3% since October 12 to 4425.84 through last Thursday. That was the highest level since April 20, 2022. It was only 7.7% below the January 3, 2022 record high. (2) Measures of breadth are improving. The percentage of S&P 500 companies

Ed Yardeni

The Economic Week Ahead: June 20-23

Jun 18, 2023 2 min read

It's a short and light week for economic data. We'll be focusing on May's Composite Cyclical Indicators (Thu). The index of Coincident Economic Indicators (CEI) is the best monthly indicator of the business cycle. It tracks the y/y growth rate of real GDP very closely (chart). It was up 1.7% y/y during April, while real GDP rose 1.6% during Q1.

Ed Yardeni

Core Inflation: The True Story

Jun 18, 2023 2 min read paid

A few of our QT members asked us to explain why core CPI inflation, which has been so sticky over the past year, should moderate over the rest of this year. The headline CPI inflation rate has dropped significantly since last summer from around 9.0% to 4.0% in May (chart). But the core inflation rate has been stuck around 6.00% since early last year. The core CPI

Ed Yardeni

DEEP DIVE: All About S&P 500 Earnings

Jun 17, 2023 4 min read paid

Earnings I: The Past The Q1 earnings season is over, and the final numbers are in. They were better-than-expected results, which isn’t surprising when the economy is growing. Worse-than-expected results tend to occur when the economy is falling into a recession. That the economy would fall into a recession has been a widespread concern—but not our outlook, as you know. So far, so good. Today, let’s review

Ed Yardeni

Stock Market's Meltup Continues

Jun 15, 2023 2 min read

Investors had a quick look at today's economic indicators and concluded that the economy is still growing albeit slowly while inflation is continuing to moderate. The FOMC's next meeting is at the end of July. By then, the committee might conclude that the federal funds rate, currently still at 5.00%-5.25%, might be restrictive enough to get the inflation rate close to 2.0%

Ed Yardeni

A Hawkish Skip at the Fed

Jun 14, 2023 2 min read paid

In this past Sunday's QT, we wrote: "On Wednesday, Fed Chair Jerome Powell will update us on the committee's latest views. Odds are the FOMC will skip another rate hike, but hint that rate hiking might not be over." Sure enough, the FOMC skipped and the committee's statement noted: "Holding the target range steady at this meeting allows the Committee to

Ed Yardeni

Dr Ed's Video Webcast 6/14/23

Jun 14, 2023 1 min read paid

Investors are on the edge of their seats: Will the FOMC raise the federal funds rate (FFR) when it meets this week or pass this time? Key will be how fast inflation is falling, and the Consumer Price Index for May will be released as they deliberate. We say monetary policy is restrictive enough already, as the higher effective FFR implies a tighter environment than the straight FFR suggests. … Also:

Ed Yardeni

Inflation Shock Continues to Abate

Jun 14, 2023 2 min read

The pandemic was a shock. It caused lots of aftershocks including an inflation problem which was widely expected to be transitory, but has seemed to be more persistent. It may turn out to be transitory after all according to today's May PPI report. We usually focus on the inflation rate of the final demand PPI for personal consumption (chart). It tends to coincide with the inflation rates for

Stephen Rybka

The Bull Was Pleasantly Surprised by May's CPI Today

Jun 13, 2023 2 min read paid

Stock prices rallied from the open today on May's CPI report. It wasn't surprisingly good. But investors and traders feared that it might be surprisingly bad. That's been the modus operandi of this bull market since October 12. It's been rallying on all the bad things that aren't happening. So far, there's been no recession, no earnings collapse,

Ed Yardeni

S&P 500's Blue Angels Are Climbing Again

Jun 12, 2023 1 min read paid

Our Blue Angels analysis multiplies the weekly forward earnings of the S&P 500/400/600 by forward P/Es of 10-22 in increments of 2 (chart). We then can see how the three stock price indexes are tracking their Blue Angels, which always fly in a parallel formation. Forward earnings is the time-weighted average of industry analysts' consensus expectation for earnings during the current year and the

Ed Yardeni

Market Call: Young Bull

Jun 11, 2023 2 min read paid

We have some good news and some bad news for the bulls. The good news is that the S&P 500 is up 20.0% since October 12, which is widely viewed as the definition of a bull market (table). The bad news is that a picture of a bull is featured in the latest Barron's cover story titled, "Don't Fear the Bull Market.

Ed Yardeni