Ed Yardeni

Market Call: The Bull Market's Alleged Vulnerabilities

Jul 7, 2024 2 min read

The stock market's bull run since October 12, 2022 has raised some concerns lately. According to the naysayers, earnings growth expectations may be too high because there are mounting signs of an economic slowdown that might lead to an economic recession. The breadth of the stock market rally continues to narrow, which may be confirming that the underlying fundamental support for the bull market is narrowing. If the

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: July 8-12

Jul 7, 2024 3 min read paid

Last month, lower-than-expected CPI and PPI inflation readings for May, along with rising unemployment claims for June, raised market expectations that the Fed will ease monetary policy sooner rather than later. The week ahead will be dominated by inflation data and jobless claims that are likely to confirm that the economy is in a disinflationary soft patch. That could boost both stock and bond prices. Consider the following: (1) CPI.

Ed Yardeni
Eric Wallerstein

DEEP DIVE: AI Hype Is Hyper

Jul 4, 2024 3 min read paid

Determining when an investment trend has run its course is more of an art than a science. While we love the productivity-enhancing possibilities that artificial intelligence (AI) offers, the AI phenomenon has many of the hallmarks of an inflating bubble. There are big bucks chasing the AI dream. New kings of industry have been crowned. And the hyperbole is flowing. Let’s take a look at some of the warning

Jackie Doherty
Ed Yardeni

Soft Patch Getting Softer. Is That Raising Odds of Fed Rate Cut in September & Stock Market Meltup?

Jul 3, 2024 3 min read paid

Last week and this week have been good ones for the recession camp of economists. Indeed, the Atlanta Fed's GDPNow tracking model's estimate of real GDP growth during Q2-2024 dropped from a robust 3.0% on June 26 to half as much today. The Citigroup Economic Surprise Index is the most negative it has been since August 2022 (chart). We are still in the soft-patch camp.

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 7/3/24

Jul 3, 2024 1 min read paid

Personal consumption expenditures data for May suggest clear skies on both the inflation and income fronts: The PCED has been gliding steadily earthward and looks on course to reach the Fed’s 2.0% y/y destination for it by year-end. Consumer spending has been showing no sign of retrenchment, and consumption trends jibe with our rosy economic outlook. Moderating inflation with a robust economy argue against the Fed’s

Eric Wallerstein
Ed Yardeni

Fed Put Jolts Stocks To New Record High

Jul 2, 2024 2 min read paid

The S&P 500 jumped to a new record high of 5509 today on better-than-expected Tesla vehicle deliveries. In addition, today’s JOLTS report showed more job openings. Nevertheless, two Fed officials suggested today that the Fed Put is back because they are worried that the Fed might cause job losses if monetary policy stays too tight for too long. Their dovish comments reinforced expectations that the Fed will

Ed Yardeni
Eric Wallerstein

Treasuries Anticipating Trump 2.0?

Jul 1, 2024 3 min read paid

Long-term US government bond prices fell sharply since the presidential debate on Thursday evening. The 10-year Treasury yield rose from 4.29% on Thursday afternoon to 4.48% today, the highest level since May 31 (chart). That was in spite of the lowest y/y print for the personal consumption expenditures deflator (PCED) since March 2021 on Friday and another sub 50.0 report for the M-PMI on Monday. We

Ed Yardeni
Eric Wallerstein

Market Call: Is The Stock Market Hazardous?

Jun 30, 2024 2 min read paid

The stock market rose to another record high last week. It has been doing so in recent weeks led by fewer sectors and fewer stocks. The S&P 500 market-cap-weighted stock price index has significantly outperformed the equal-weighted index in recent weeks (chart). Many technicians warn that this could be a bearish sign in the short-run if the leaders experience a correction. An alternative scenario we favor is that

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: July 1-5

Jun 30, 2024 2 min read paid

We know there will be fireworks on July 4th. The question is whether we should expect any blasts or just fizzling sounds during the week ahead related to the economy and the labor market. The holiday-shortened week will be jampacked with employment indicators. We aren't expecting any big surprises: (1) Payroll employment. We expect that June's employment report (Fri) will show payrolls rose by 150,000

Ed Yardeni
Eric Wallerstein

DEEP DIVE: Charging Bull

Jun 29, 2024 7 min read paid

Strategy I: Hoof Marks. Even the bulls are getting trampled by the bull market in stocks. Many investment strategists are scrambling to raise their targets for the S&P 500. At the end of 2022, we predicted that the index would increase 20% from 3839 to 4600 by the end of 2023. It got there by the end of July of that year. We stuck to our target as

Ed Yardeni
Eric Wallerstein

Another Soft Patch

Jun 27, 2024 3 min read paid

The economy has experienced neither a hard landing nor a soft landing since the Fed started tightening monetary policy in March 2022. It has experienced a few rolling recessions in industries like housing and retailing, which spurred soft patches in overall economic growth. The economy may be going through another soft patch, as evidenced by the Citigroup Economic Surprise Index, which has been modestly negative since May 3 (chart). After

Ed Yardeni

Rate Cuts This Year Unlikely As Fed Gets Closer To 2.0% Target

Jun 26, 2024 3 min read paid

We still expect that the Fed's preferred core PCED inflation measure will fall to the Fed's 2.0% target by the end of this year (chart). It was already down to 2.8% y/y in April. May's number will be released on Friday, and should show further progress. We don't see the Fed cutting the federal funds rate (FFR) this year,

Ed Yardeni
Eric Wallerstein

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