Ed Yardeni

DEEP DIVE: What Will The Fed Do?

Sep 13, 2024 4 min read paid

The financial markets have been expecting more cuts in the federal funds rate (FFR) than Eric and I have all year so far. At the start of this year, the markets anticipated six to seven rate cuts in 2024 (Fig. 1 below). We expected two to three at most. The markets were more dovish on the rate outlook than we were because of investors’ widespread belief that the Fed would

Ed Yardeni
YRI Team

Zettascale Computing Is Coming Using Nvidia's Blackwell Chips!

Sep 12, 2024 2 min read paid

Yesterday, stock prices initially fell sharply following August's CPI report, but AI fever quickly turned the S&P 500 around to a 1% gain. Yesterday, Oracle announced it is taking orders for the first "zettascale" AI supercomputer, which will be powered by up to 131,072 Nvidia Blackwell chips. Nvidia CEO Jensen Huang also told a Goldman Sachs conference that demand for their Blackwell chips

Ed Yardeni
YRI Team

CPI Triggered Stock Market Hissy Fit

Sep 11, 2024 3 min read

This morning's CPI report showed inflation continues to moderate. Nevertheless, stock prices initially fell sharply on the news. While the headline CPI was up 0.2% m/m as expected, the core rose 0.3% instead of the expected 0.2%. That minor difference convinced lots of traders that the Fed would cut the federal funds rate (FFR) by 25bps rather than 50bps on September 18. Nevertheless, the

Ed Yardeni
YRI Team

Dr Ed's Video Webcast 9/11/24

Sep 11, 2024 1 min read paid

The latest batch of labor market indicators has caused a temporary “growth scare,” in our opinion. Concerns that economic growth is slowing have convinced the markets that the Fed will open up the easing spigots and cut the federal funds rate by more than we expect. … Previous peaks in the yield-curve spread suggest that the bond yield is close to bottoming. … There were bright spots in the employment report too:

Ed Yardeni
YRI Team

China Is The Source Of The Deflation Trade

Sep 10, 2024 2 min read paid

Forget about a recession in the US. Currently, it is China's recession/depression that is weighing on oil prices, global bond yields, and the dollar. Weak Chinese demand for oil caused OPEC today to trim the outlook for global oil demand, further depressing oil prices. Brent crude oil prices fell below $70 a barrel on Tuesday to their cheapest since December 2021 (chart). Declining oil prices dragged the

Ed Yardeni
YRI Team

No News Is Good News

Sep 9, 2024 3 min read paid

Dr. Ed was interviewed on Bloomberg Surveillance this morning at 7 a.m (see link below). Ace journalist Lisa Abramowitcz noted that during the summer, we were saying that the economy is resilient and doesn't need much monetary stimulus, which might cause a meltup in stock prices. Now we are saying that if the Fed cuts the federal funds rate (FFR) by 50bps instead of 25bps on September

Ed Yardeni
YRI Team

The Economic Week Ahead: September 9-13

Sep 8, 2024 3 min read paid

This week's economic indicators will be primarily focused on inflation. Barring any unexpected surprises on the inflation front, the financial markets may care more about the few labor market indicators. The FOMC entered the blackout period ahead of its September meeting yesterday, sparing markets from an extra source of volatility. We expect the combination of a normalizing hiring, inflation, and interest rate environment (a.k.a. Immaculate Disinflation)

Ed Yardeni
YRI Team

Market Technicals: Is Sentiment Bearish Enough To Signal A Market Bottom?

Sep 8, 2024 2 min read

We asked Joe Feshbach for an update of his take on the stock market from a trading perspective: "Even with the recent decline in the stock market, I’m still recommending a cautious/defensive approach to stocks. My two biggest concerns have been the optimistic levels that the sentiment indicators have reached and the parabolic moves in technology charts followed by their significant recent declines. We’ve had a

Ed Yardeni
YRI Team

Market Call: Carry-Trade Unwind Part II

Sep 8, 2024 3 min read paid

Something doesn't make sense. Why are stock prices falling when the Fed is set to lower interest rates to avert a recession and to stop the unemployment rate from rising by boosting economic growth? We had a glimpse of the answer in early August: The carry trade is still unwinding. Expectations that the Fed will lower our interest rates, while the Bank of Japan raises their interest rates

Ed Yardeni
YRI Team

Employers Are Not Hiring Or Firing. Productivity May Be the Reason.

Sep 6, 2024 3 min read paid

Ed Yardeni

The Great Normalization

Sep 5, 2024 3 min read paid

Oops: Bloomberg reported on Tuesday after the stock market closed, that the Department of Justice (DOJ) had sent Nvidia a subpoena related to a potential antitrust investigation. We speculated that a leak of that information might have caused Tuesday's selloff. On Wednesday after the close, Nvidia denied that it had received a DOJ subpoena. Go figure! Today's economic data were consistent with our short-term thesis (i.

Ed Yardeni
YRI Team

September Has Been A Busy Month So Far

Sep 4, 2024 3 min read paid

During the first two trading days of September, stock prices, oil prices, and bond yields fell sharply; the Department of Justice (DOJ) subpoenaed Nvidia in its antitrust probe; Bank of Japan (BOJ) Governor Kazuo Ueda reaffirmed his hawkish monetary policy stance; US job openings were lower-than-expected; and, the US Treasury yield curve pancaked. Furthermore, the Fed's Beige Book reported that nine out of 12 Federal Reserve regional districts

Ed Yardeni
YRI Team

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