Ed Yardeni

DEEP DIVE: The Causes of Recessions & Bear Markets, a Recap

May 11, 2024 4 min read paid

There are three ways that recessions typically are triggered: 1) a monetary-tightening-induced financial crisis turns into a credit crunch; 2) a geopolitical crisis causes oil prices to soar; or 3) speculative asset bubbles burst. All three have caused recessions in the past. Consider the following relevant points: (1/6) The most common reason recessions have occurred in the past is the tightening of monetary policy, usually as the Fed became

Ed Yardeni
YRI Team

The Recession Claim

May 9, 2024 2 min read

One of our competitors claims that we are in a recession. Another claims that we will soon be in a recession. The most widely anticipated recession of all times is turning into the longest widely anticipated recession of all times. One day, the diehard hard-landers will be right. Was today the day? We're sure that their heartbeats quickened on today's jobless claims report. Consider the following:

Ed Yardeni
YRI Team

Tight Fed Fueling Foreign Stock Market Rallies?

May 8, 2024 3 min read paid

In the past, the major foreign central banks often followed the Fed's lead. This time, they aren't waiting for the Fed to ease before doing so themselves. That's boosting the foreign exchange value of the dollar as well as many overseas stock markets. Consider the following: (1) The Swedish Riksbank cut its official rate by a quarter-point today, to 3.75% from 4.00%

Ed Yardeni
YRI Team

Dr Ed's Video Webcast 5/8/24

May 8, 2024 1 min read paid

Investors in both stock and bond markets are suddenly blooming with optimism. Both markets rallied on Friday’s (mostly) positive employment report, including yet another sub-4.0% jobless rate and despite some negatives in the report. Stoking the optimism, perversely, has been economic news suggesting weakening: Cheery investors have focused not on that but on the potential ramification of it, that interest rates won’t be kept higher for longer

Ed Yardeni

DEEP DIVE: AI Chips & The Others

May 7, 2024 5 min read paid

A handful of semiconductors companies reported earnings and made it clear that the rabid demand for chips used to run artificial intelligence (AI) does not carry over to demand for chips in other segments of the market. Skyworks Solutions highlighted the weakness in chips for mobile phones. NXP Semiconductors laid out the inventory destocking that has plagued the auto industry. And while Advanced Micro Devices’ (AMD) AI chips had a

Ed Yardeni

Monster Trucks With Monster Bills

May 7, 2024 2 min read

Since just before the pandemic during January 2020 through March of this year, the CPI indexes for new autos, auto maintenance & repairs, and auto insurance are up 21.0%, 34.8%, and 44.6% (chart). These all exceed the 20.6% increase in the headline CPI over this period. Why? Americans are buying lots more expensive light trucks than passenger cars. They cost more to buy, maintain, repair, and

Ed Yardeni

US Purchasing Managers Report Weakening Economy

May 6, 2024 2 min read paid

Among last week’s batch of weaker-than-expected economic indicators were April’s M-PMI and NM-PMI compiled by the Institute for Supply Management (ISM). Both fell below 50.0 during April, with the former at 49.2 and the latter 49.4 (chart). Here’s more:

Ed Yardeni

Market Call: Nothing To Fear But Nothing To Fear, Again.

May 5, 2024 2 min read paid

Nothing to worry about? The geopolitical risk premium in the price of oil has dropped sharply since early April. The price of a barrel of Brent crude oil slipped to $82.96 from a recent peak of $91.17 on Friday, April 5 (chart). Stock market sentiment indicators have turned less bullish, which is bullish from a contrarian perspective. Last week's economic indicators were on the weak side.

Ed Yardeni

The Economic Week Ahead: May 6 - 10

May 5, 2024 2 min read

It's slim pickings this week on the US economic front. The news is mostly about credit conditions. Then again, earnings reporting season isn't over. And, we can always count on the members of the Federal Open Mouth Committee to make headlines now that their blackout period is over. Here is what we can expect from this week's credit market indicators: (1) Q2's

Ed Yardeni

Meet Eric

May 3, 2024 2 min read

I am very pleased to announce that Eric Wallerstein is joining the Yardeni Research team as our Chief Markets Strategist. He will work with me and the rest of the YRI team as we continue to produce the very best analysis of the global economy and financial markets that we can. Eric joins us from The Wall Street Journal, where he covered global macro—or as he says, the “anything

Ed Yardeni

Stocks & Bonds Rally Despite Weak Productivity Report

May 2, 2024 2 min read

Go figure: Stocks & bonds sold off on Tuesday following a hotter-than-expected Q1 Employment Cost Index (ECI). It was up 5.4% q/q (saar) and 4.1% y/y. Today, they both rallied despite a hot Q1 unit labor costs inflation report. We agree with the markets' response to today's news because it is consistent with our view that inflation is still moderating when measured on

Ed Yardeni

Powell Says No Stag, No Flation.

May 1, 2024 2 min read paid

Fed Chair Jerome Powell wasn't dovish at his presser today. But he wasn't hawkish either. He said, "I think it's unlikely that the next policy rate move will be a hike." The 2-year Treasury yield fell back below 5.00% to 4.98%, consistent with one 25bps cut in the federal funds rate over the next twelve months. The S&P

Ed Yardeni

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