Archive

A Bowl of Mixed Nuts

Jan 4, 2023 2 min read paid

Today's batch of economic indicators was mixed, showing that the manufacturing economy remains weak, while the labor market remains strong. In addition, inflationary pressures continue to ebb in the goods sector. Yesterday, the Atlanta Fed's GDPNow tracking model's latest estimate was that real GDP rose 3.9% (saar) during Q4, up from 3.2% during Q3. Here's more:

Ed Yardeni

The Bears' Favorite Chart

Jan 3, 2023 2 min read

One of the bears’ favorite charts shows the relationship between the S&P 500 and the size of the Fed’s balance sheet. The former rose 609% from March 9, 2009 through January 3, 2022 (chart). Over this same period, the Fed’s assets rose 1,005% from $760 billion in March 2009 to $8.4 trillion in January 2022. That was all wildly bullish for stocks and bonds.

Ed Yardeni

Dr Ed's Video Webcast 1/3/23

Jan 3, 2023 1 min read

With last year thankfully behind us, we take stock of what could go both wrong and right for the economy in 2023. We’re optimistic that 2023 will be better than 2022 for several reasons, but that’s a contrarian viewpoint. 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. We maintain

Ed Yardeni

Running Out of Money?

Jan 2, 2023 2 min read members

Monetarists seem to be making a comeback, and they are sounding the alarm that the recent weakness in the M2 measure of money is confirming that monetary policy already is tight enough to cause a recession. We’ve addressed this issue in the past, and we still aren’t alarmed.

Ed Yardeni

MegaCap-8 Stocks Had a Very Bad 2022

Jan 2, 2023 2 min read

Sometimes it is better to own a small boat than a very large yacht. The former is cheaper to operate and easier to maneuver. The MegaCap-8 stocks won the S&P 500 regatta during the pandemic years of 2020 and 2021. They badly underperformed during 2022 once the pandemic abated. (The MegaCap-8 stocks are Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, NVIDIA, and Tesla.) Consider the following: (1) Market capitalization.

Ed Yardeni

The Economic Week Ahead, January 3-6

Jan 1, 2023 2 min read paid

The first week of 2023 will be action packed, especially with so many labor market indicators coming out. If they are too strong, investors will fear higher-for-longer interest rate hikes by the Fed. If they are too weak, investors will fear an impending recession. The first scenario is bad for stocks and bonds. The second scenario is bad for stocks but good for bonds. If the upcoming batch of labor

Ed Yardeni

Happy CPI Inflation Surprise Coming Jan. 12?

Dec 29, 2022 2 min read paid

The stock market could start to discount the possibility of a lower-than-expected December CPI report, which will be released on January 12. This prediction doesn't come with a money back guarantee. However, here are some clues suggesting that inflation may be falling faster than widely expected:

Ed Yardeni

Regional Puzzle Pieces Showing Slowing Economy & Inflation

Dec 28, 2022 2 min read

Almost everyone working on Wall Street is on vacation, except for the bears. They've been munching on stock prices, especially those of some of the MegaCaps like Tesla and Apple. There was a Santa Claus rally, sort of, when the S&P 500 climbed 14% from October 12 through November 30. But it has fizzled since then as investors fretted about further Fed tightening and a recession

Ed Yardeni

Bonds Weigh On Stocks

Dec 27, 2022 1 min read paid

The 10-year US Treasury bond yield rose from a recent low of 3.425% on December 7 to 3.849% today, the highest since early November. We still believe it peaked at 4.248% on October 12. The spread between the 10-year and 2-year US Treasuries remained inverted at 50bps today. An inverted yield curve tends to coincide with the end of monetary policy tightening cycles and peaks in the

Ed Yardeni

2023: Another Year of Living Dangerously?

Dec 26, 2022 2 min read

With the benefit of hindsight, the title of this QT certainly applied to 2022. It was a tough year for investors. The consensus view is that 2023 could be as tough: (1) A December NYT opinion piece by Peter Coy is titled, "A Strong Signal That Recession Is Looming." He focuses on the inverted yield curve, which often in the past accurately predicted a financial crisis that morphed

Ed Yardeni

The No-Landing Scenario

Dec 23, 2022 2 min read paid

Ed Yardeni

What Are We Rooting For?

Dec 22, 2022 2 min read

On Tuesday, the stock market sold off on fears of a hard landing. On Wednesday, the market rallied on better-than-expected earnings reports from Nike and FedEx and better-than-expected consumer confidence. Today, the market sold off on news that the labor market remains tight, raising fears of higher-for-longer Fed rate hiking. On the other hand, the Index of Leading Economic Indicators, released today, was very weak. After the close yesterday, Micron

Ed Yardeni