Ed Yardeni

Trump 2.0 Supercharges Our Stay Home Investment Strategy

Nov 14, 2024 3 min read paid

We've been bullish on the dollar for a while. Since, the Fed's September 18 meeting, the US Dollar Index (DXY) is up 5.8% (chart). Roughly half of that move has occurred since last Tuesday's US elections. The strong dollar confirms our view that the Fed has already cut the federal funds rate too much too soon, and now likely won’t be lowering

Ed Yardeni
Eric Wallerstein

Sticky Landing For Inflation?

Nov 13, 2024 3 min read paid

Today's CPI report suggests that inflation may be getting stuck north of the Fed's 2.0% target. The headline and core CPI inflation rates rose 2.6% and 3.3% y/y during October. Goods prices are still deflating. But supercore inflation, rent inflation, and wage growth all rose last month suggesting they are getting sticky at relatively high rates. This along with strong economic growth

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 11/13/24

Nov 13, 2024 1 min read paid

Something’s amiss with Fed Chair Powell’s explanation for lowering the federal fund rate a second time in two months despite an economy he admits is performing remarkably well. He tied the rationale for the move to the theoretical “neutral FFR,” implying that monetary policy needs to be less restrictive to reach that point, even though that point is intrinsically unknowable. Also implied was that the related risks are

Ed Yardeni
Eric Wallerstein

From Election Uncertainty To Policy Uncertainty

Nov 12, 2024 3 min read paid

The NFIB survey of small business owners was released today showing a record high in their uncertainty index during October (chart). That's not surprising since the polls showed that the presidential race was too close to call, raising the prospect of a contested election. The same happened prior to the previous two elections. The uncertainty index will undoubtedly fall when November's survey is released. However, it

Ed Yardeni
Eric Wallerstein

China: A Deflating Dragon

Nov 11, 2024 3 min read paid

Over the past three years, most American economists believed that a recession would be necessary to bring inflation down to 2.0% in the US. While the US economy managed to avoid a downturn, those predictions may have been right. The recession, however, was in China as the huge negative wealth effect of falling property and stock prices caused Chinese consumers to retrench. China's government encouraged manufacturers to

Ed Yardeni
Eric Wallerstein

Market Call: Animal Spirits Are Back & Boosting the Roaring 2020s! Fueling A Meltup Too?

Nov 10, 2024 3 min read paid

Just after Donald Trump won the presidential race on November 8, 2016, we observed that the economy and stock market were charged up with "animal spirits," a term coined by John Maynard Keynes meaning spontaneous optimism. Animal spirits are back now that Trump won a second term on November 5 and in a clean sweep if the Republicans win the House, which seems likely. The stock market jumped

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: November 11-15

Nov 10, 2024 3 min read paid

The week ahead will provide updates on inflation, consumer spending, and manufacturing. We expect inflation might have stalled in October, interrupting its decline toward the Fed's 2.0% target. We still expect a solid increase in inflation-adjusted incomes last month, which should fuel strong consumer spending. The goods sector likely remained depressed last month, especially as hurricanes and worker strikes weighed on manufacturing hours worked. Here's

Ed Yardeni
Eric Wallerstein

Powell's Mixed Message Remains Dovish

Nov 7, 2024 3 min read

The Federal Open Market Committee (FOMC) cut the federal funds rate (FFR) by 25bps today as widely expected. We expected it as well, though we still believe that the now 75bps cut in the FFR since September 18 is too much, too soon because both the economy and the labor market remain strong. In his press conference today, Fed Chair Jerome Powell acknowledged several times that both remain solid. He

Ed Yardeni
Eric Wallerstein

Trump 2.0 and the Financial Markets

Nov 6, 2024 4 min read paid

Donald Trump's win and the Republican sweep of the House (probably) and the Senate (certainly) is consistent with our Roaring 2020s scenario. Indeed, it increases the odds that the good times will continue through the end of the decade and possibly into the 2030s. Stocks soared today on the widespread perception that Trump 2.0 will include a cut in the corporate tax rate and reductions in business

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 11/6/24

Nov 6, 2024 1 min read paid

The bond market seems to be ignoring developments that usually halt rising yields in their track. Investors seem focused instead on the stimulus—both fiscal and monetary—that’s likely coming to an economy that doesn’t need it. The effective result: The bond market is tightening the economy itself. The Bond Vigilantes are back and threatening to take the 10-year Treasury bond yield up to the 5% realm. That

Ed Yardeni
Eric Wallerstein

25bps Cut? We Strongly Dissent!

Nov 5, 2024 3 min read paid

We may or may not know tonight who will be the next president, but we should know which party will win a majority in the Senate and the House. It appears that Republicans are likely to do so. In this case, a Harris administration would be gridlocked, while a Trump administration would have more power to implement his policies, including higher tariffs (raising inflation risks) and lower taxes (ballooning the

Ed Yardeni
Eric Wallerstein

Contrarian Curses & Tricky Cross Currents Since September 18

Nov 4, 2024 3 min read paid

Investors often rejoice when a stock they own is selected to join a major market index. Index funds collectively have trillions of dollars in AUM and must buy the stock in bulk, giving a boost to its price. But sometimes these bestowed honors can be a curse for the newbie. Super Micro Computer, for instance, joined the S&P 500 on March 18. It had peaked at a record

Ed Yardeni
Eric Wallerstein

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