Ed Yardeni

A Happy Day Is Here Again For Stocks & Bonds

Nov 10, 2022 1 min read

Stocks and bonds rallied and the dollar fell after today's release of October's better-than-expected CPI. The headline rate was 7.7% y/y, lower than the 7.9% consensus and below September's reading of 8.2%. Leading the way down has been the CPI durable goods inflation rate, as we've been expecting (chart). We've been thinking that the bear market

Ed Yardeni

Stock Market Sentiment Readings Mostly Bearish

Nov 10, 2022 2 min read paid

The Investors Intelligence Bull/Bear Ratio remained below 1.00 this week for the eighth consecutive week, holding at 0.96 for a third week, after falling steadily from 1.15 in mid-September to 0.57 four weeks ago—which was the lowest since March 2009 (chart). Bullish sentiment dipped for the second week to 35.2% after increasing the prior two weeks from 25.0% (the fewest bulls since

Ed Yardeni

Cryptocurrencies Are Digital Tulips

Nov 9, 2022 1 min read

Stocks sold off today partly as a result of the turmoil in cryptocurrencies markets. It was a risk-off day. Here is what I wrote in our May 11, 2021 Morning Briefing about this asset class: "I had been thinking of cryptocurrencies as 'digital tulips,' reminiscent of the 17th century tulip mania in Amsterdam that drove up tulip prices beyond reason. The difference is that cryptocurrencies are traded

Ed Yardeni

Industry Analysts Cutting S&P 500 Earnings

Nov 9, 2022 3 min read paid Featured

The following is an excerpt from our November 9, 2022 Morning Briefing. Industry analysts have yet to get the recession memo. They are still estimating that S&P 500 revenues are growing. However, they’ve been reading the memo about the squeeze on profit margins from rising costs. As a result, many of them have been reducing their estimates for the profit margins of the S&P 500

Ed Yardeni

Small Business Owners Have Some Bad News

Nov 8, 2022 1 min read

The National Federation of Independent Business (NFIB) released its October survey of small business owners today. They remain pessimistic about the general business outlook. They are still struggling to find workers and to keep them. In any event, their labor costs are rising rapidly and forcing them to raise their prices. They've been sucked into the economy's wage-price spiral. During October, 32% of small business owners

Ed Yardeni

Third Year of Presidential Cycle Is Bullish

Nov 8, 2022 1 min read paid Featured

We previously observed that the stock market has a strong tendency to perform well following midterm elections irrespective of the actual election outcome. Since 1942, during each of the 3-month, 6-month, and 12-month periods following each of the 20 midterm elections, the S&P 500 was up on average by 7.6%, 14.1%, and 14.9%. Of the 60 observations, only three of them were negative. But none

Ed Yardeni

Is Gridlock In Washington Bullish for Stocks?

Nov 7, 2022 2 min read

It is widely believed that political gridlock is bullish for stocks in the US. The market is happiest when our constitutional system of checks and balances is working. Therefore, a divided government is preferable to a unified government when one party controls the White House and both houses of Congress. So a widely expected "red wave" tomorrow should be bullish for stocks. We have previously observed that the

Ed Yardeni

Dr Ed's Video Webcast 11/7/22

Nov 7, 2022 1 min read

For a variety of reasons, there’s a severe mismatch between the demand for and supply of labor in the US. That’s created a maelstrom in the market, with extraordinary levels of turnover: One third of payroll employees have quit their jobs over the past 12 months, most for higher-paying ones. That’s driving up wage inflation and driving down productivity. Below is exclusive early access to Dr Ed&

Ed Yardeni

Economic Week Ahead, November 7-11

Nov 5, 2022 1 min read paid

You can access a “live” version of the calendar below--with links to our automatically updated charts for most of the indicators shown--at this link on our website; bookmark it for easy access. Financial market participants have freaked out about the CPI during most of the previous months this year. Will they do so again over October's CPI (released on Thu.)? Maybe not this time. We expect further signs

Ed Yardeni

PMI Prices-Paid Indexes Predicting Falling Inflation

Nov 5, 2022 1 min read

Rapidly rising inflation since early last year has forced the Fed to raise interest rates significantly this year. That's been bad news for stock and bond investors, particularly this year. From the end of the Great Financial Crisis through the end of the Great Virus Crisis (i.e., 2009-2021), the winning investment strategy was to own both assets. Investors' mantra was: "Don't fight the

Ed Yardeni

S&P 500 Earnings Estimates Are Falling

Nov 4, 2022 1 min read

Industry analysts who cover the S&P 500 companies are responding to the current earnings reporting season for Q3-2022 by continuing to cut their earnings estimates for Q4-2022 and all four quarters of next year (charts below). They've been doing so through the last week of October when several of the MegaCap-8 reported disappointing earnings. The 344 of the S&P 500 companies that have reported

Ed Yardeni

DEEP DIVE: Has the S&P 500 Discounted a Hard Landing?

Nov 4, 2022 4 min read paid Featured

One of our accounts recently asked us to assess the extent to which the stock market has discounted a garden-variety recession. That’s an interesting question. We have been thinking and writing about this question all year. This is an excerpt from our Oct 31 Morning Briefing. Our current assessment is that the market has discounted a rolling recession, a.k.a. a “soft landing,” “growth recession,” or “mid-cycle slowdown.

Ed Yardeni

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