Archive

Federal Net Interest Outlays: Time to Worry?

Jan 16, 2023 1 min read paid

The latest federal budget data were released last week. Over the past 12 months through December, the deficit was $1.4 trillion with outlays of $6.3 trillion and receipts of $4.9 trillion (chart). Among the fastest growing outlays is net interest paid by the federal government. It soared to a record $517.7 billion over the 12 months through December (chart).

Ed Yardeni

Young Bull Market?

Jan 13, 2023 2 min read

Last year, we thought that the S&P 500's bear market might have bottomed at 3666 on June 16, when sentiment was as bearish as it was when the index bottomed at 666 on an intraday basis on March 6, 2009. We were wrong. It fell to a new low of 3577 on October 14. We viewed that as a successful retest of the June low. So

Ed Yardeni

What's In Style? Value, SMidCaps & Global

Jan 12, 2023 2 min read paid

The S&P 500 is back testing its 200-day moving average (chart). It previously did so on November 30, but failed to move higher. It might succeed this time if the current Q4-2022 earnings reporting season isn't disappointing relative to expectations. The S&P 500 equal-weighted index continues to outperform the S&P 500 market-cap weighted index (chart). More stocks are participating in the recent

Ed Yardeni

Goldilocks, the Bears & Today's CPI

Jan 12, 2023 2 min read paid

Ed Yardeni

Copper, Mortgages, GDP, Breadth & Sentiment

Jan 11, 2023 2 min read

Yesterday, the World Bank slashed its 2023 global economic growth rate outlook to 1.7% from its earlier projection of 3.0%. In its Global Economic Prospects, the bank warned that the global economy is "perilously close to falling into recession." Dr. Copper, the metal with a PhD in economics, begs to differ. The nearby futures price of the basic metal is up to $4.17 currently from

Ed Yardeni

Dr Ed's Video Webcast 1/10/23

Jan 10, 2023 1 min read

We still see greater odds that the economy will glide to a soft landing (60%) than plummet to a hard one (40%), which nearly everyone else expects. What might a soft landing look like? Below is exclusive early access to Dr Ed's Webcast for paid members. This post and video will open to the public on a later date. The happiest—and most contrary—of scenarios would be

Ed Yardeni

Small Business Owners Say Job Market Cooling

Jan 10, 2023 2 min read

December's NFIB survey of small business owners should make the Fed's hawks a bit less hawkish. They want to see evidence that the labor market is cooling and that inflationary pressures are easing. Today's NFIB report confirmed that both may be underway: (1) Fed officials have been focusing on job openings in the JOLTS report. They want to see it drop significantly indicating that

Ed Yardeni

Is The Service-Providing Economy Cooling Off?

Jan 9, 2023 2 min read paid

Consumers have cut back on spending on goods because they went on a goods-buying binge on them during 2020 and 2021, when many services businesses were either closed or limited by social distancing restrictions. During 2022, they pivoted to spending less at retailers and more at services providers as they reopened (chart). Consumers tend to determine the pace of economic activity. In a soft-landing scenario, they should continue to spend

Ed Yardeni

The Economic Week Ahead Jan. 9-13

Jan 8, 2023 1 min read

The Q4-2022 earnings reporting season starts this week with the big money center banks. They are unlikely to surprise investors. Their managements may once again warn, as they have in the past, that a consumer-led recession is likely this year. That's old news, and the markets aren't likely to react to it. Besides, if the banks expect a recession, why haven't they been adding

Ed Yardeni

Feshbach's Market Call

Jan 6, 2023 2 min read paid

We asked Joe Feshbach, our go-to market trading maven for his latest thoughts on the stock market as the new year begins. Here they are:

Ed Yardeni

Another Batch of Soft-Landing Indicators

Jan 6, 2023 2 min read

Both the stock and bond markets cheered this morning's batch of economic indicators. For starters, payroll employment rose 223,000 during December, confirming yesterday's ADP payroll gain of 235,000. In addition, the more volatile household measure of employment jumped 717,000. These numbers might have spooked the financial markets but for the moderation in average hourly earnings inflation, which fell to 4.6% y/y

Ed Yardeni

Strong Labor Market Frustrates Fed

Jan 5, 2023 2 min read paid

On August 27, 2020, Fed Chair Jerome Powell's speech at Jackson Hole explained why on that same day the Fed issued a revised Statement on Longer-Run Goals and Monetary Policy Strategy. The statement and Powell's remarks stressed that monetary policy would focus on reviving the labor market after it was weakened by the pandemic. Powell said: "With regard to the employment side of our mandate,

Ed Yardeni