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

Confidence Survey Shows Jobs Are Still Relatively Plentiful

Jun 25, 2024 2 min read paid

The first available monthly indicator of the labor market is the "jobs plentiful" series in the Consumer Confidence Index (CCI) survey. Today, June's reading showed that 38.1% of respondents said so (chart). That's a slight uptick from May, and a relatively high reading. The "jobs hard to get response" ticked down to 14.1%, which is a very low reading. The

Ed Yardeni

Technology Now & Then

Jun 24, 2024 3 min read paid

Are stock market valuations too high? There is no obvious answer to the valuation question. So we are dependent on history for some guidance. We don’t have to go very far back in time to find a meltup that looks similar to the current one. The obvious analogy is to that of the late 1990s: (1) Valuation multiples, now & then. The S&P 500 peaked at a

Ed Yardeni

The Economic Week Ahead: June 24-28

Jun 23, 2024 3 min read paid

The key indicator everyone's watching this week is May's PCED (Fri). We expect the Fed's preferred inflation gauge will continue to show progress toward its 2.0% target. The labor market may also take center stage this week. If weekly jobless claims (Thu) increase sharply after falling 5,000 to 238,000 in the June 15 week, the 10-year Treasury yield would likely dip

Ed Yardeni

Market Call: Bad Breadth Again

Jun 23, 2024 3 min read

The stock market has a bad breadth problem again. For a while, it seemed to be attributable to the outperformance of the Magnificent-7. Many other stocks performed well, but not as well as the Mag-7. More recently, the outperformance seems to be narrowing to the Magnificent One, i.e., Nvidia (chart). Technical analysts are warning that this development increases the risks of a selloff in the market led by technology

Ed Yardeni

DEEP DIVE: Winning Streaks Usually Don't Last Forever

Jun 21, 2024 10 min read paid

TAMED I: Technical Analysis Of Macro Economic Data. Over the past two years, the hard landers had innumerable theories and charts to explain why higher interest rates would undoubtedly plunge the economy into a recession. Now, the diehard hard landers are again insisting that their long-held recession call will be proven correct soon. Others among them say we’re already in a recession. So far, these forecasts have been wrong.

Ed Yardeni

Multi-Family Housing Glut?

Jun 20, 2024 2 min read paid

Today's batch of economic indicators was on the weak side. Indeed, the Citigroup Economic Surprise Index fell deeper into negative territory today (chart). Does this suggest that the odds of a recession are increasing? Nope: The Atlanta Fed's GDPNow tracking model is now projecting 3.0% real growth in Q2, down from 3.1% on June 18. The stock market held its ground: The S&

Ed Yardeni

Stock Market Meltup: Earnings-Led Or Valuation-Led?

Jun 19, 2024 2 min read paid

Ed Yardeni

Dr Ed's Video Webcast 6/19/24

Jun 19, 2024 1 min read paid

The rates of unemployment and inflation aren’t always inversely correlated, as the Phillips Curve model posits. Historically, they have often been; in recent times, not so much. The problem with the model is that it doesn’t account for the effects of productivity growth on price inflation. … The high rates of goods inflation experienced after the pandemic proved to be transitory, as we had anticipated. Services inflation has been

Ed Yardeni

Consumers Consuming, Producers Producing & Treasury Borrowing

Jun 18, 2024 2 min read paid

May's retail sales, including food services, rose just 0.1% m/m, weaker than expected (chart). That's in current dollars. Adjusted for inflation, they were not as weak. CPI goods fell 0.1% m/m during May. So real retail sales, less food services, rose 0.3%. Much of the recent weakness in retail sales has been in housing-related merchandise since housing sales remain weak. Real

Ed Yardeni

Recession With Chinese Characteristics

Jun 17, 2024 2 min read paid

China’s May economic indicators were broadly negative, as evidenced by the recent weakness in Chinese stock prices as well as the price of copper, which is very sensitive to economic developments in China (chart). The bursting of China's property bubble continues to weigh on the economy despite the government's lame measures to support property prices. Weak home sales and property investment data sent Chinese real

Ed Yardeni

Market Call: Momentum Meltup, Blowoff Top, Or Both?

Jun 16, 2024 3 min read paid

Consumer price disinflation is raising expectations for a Fed rate cut, which is fueling a meltup in stock prices. This morning on CBS' "Face the Nation," Minneapolis Fed President Neel Kashkari said that a rate cut by year-end is a “reasonable prediction.” On Friday, the 10-year Treasury bond yield fell below 4.25% to 4.20%. The technical picture is signaling that it might continue to fall

Ed Yardeni

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