Ed Yardeni

DEEP DIVE: Dow 40,000 And Counting

May 24, 2024 4 min read paid

The Baby Boomers have been heavily influenced by a couple of Spocks—Dr. Benjamin Spock and Spock of Star Trek, played by Leonard Nimoy. Dr. Spock was a pediatrician who wrote Baby and Child Care (1946). It became the unofficial bible of child rearing as millions of mothers read it and raised their Baby Boom children according to the book’s advice. In the 1960s and 1970s, conservatives blamed Dr.

Ed Yardeni

Will Nvidia Trump The Fed?

May 23, 2024 2 min read paid

Yesterday's FOMC minutes confirmed that Fed officials are in no rush to lower the federal funds rate (FFR) and some are considering the possibility that they might have to raise it if inflation stalls above the Fed's 2.0% target. The 2-year Treasury yield is back up to 4.94% implying one 25bps rate cut over the next 12 months. So stocks sold off on fears

Ed Yardeni

Dow 60,000: Here We Come

May 22, 2024 3 min read

The Dow Jones Industrial Average closed above 40,000 for the first time on Friday, May 17 (chart). Today it is back down slightly below this level. We hope the title of this QT doesn't turn out to be a jinx, but we are still aiming for Dow 60,000 by 2030 in our Roaring 2020s scenario. Along the way, there could be corrections and even another bear

Ed Yardeni

Dr Ed's Video Webcast 5/22/24

May 22, 2024 1 min read paid

Boomer-led households’ collective net worth has skyrocketed 19-fold since 1990. As the generation has lived long and prospered, so has the stock market (rising 40-fold over their adulthood) and the US economy (with nominal GDP up eightfold since 1982). Looking ahead, our Roaring 2020s scenario assumes faster-than-average growth for S&P 500 earnings, GDP, and productivity. Faster productivity growth should depress unit labor costs and inflation in a process

Ed Yardeni

Why Are LargeCaps Doing Better Than SMidCaps?

May 21, 2024 2 min read paid

Why has the S&P 500 LargeCaps stock price index been more expensive than the indexes for the S&P 400 MidCaps and S&P 600 SmallCaps since the pandemic (chart)? From around 2005 until about 2019, the forward P/E of the S&P 500 had mostly been below the forward P/Es of the SMidCaps (chart). The last time that LargeCaps sported higher P/

Ed Yardeni

Anatomy Of The Bond Yield

May 20, 2024 2 min read paid

We expect that the 10-year US Treasury bond yield will remain rangebound between 4.00% and 5.00% for the foreseeable future. We expect to see it more often below 4.50% (the mid-point of the range) than above it. This is consistent with our view that interest rates have normalized: They are back to where they were prior to the "Great Abnormal" period from the Great Financial

Ed Yardeni

Market Call: From Dow 40,000 To Infinity & Beyond

May 19, 2024 3 min read

The Dow Jones Industrial Average closed above 40,000 on Friday for the first time. It's on track to rise 50% to 60,000 by 2030, in our opinion (chart). The S&P 500 should rise by as much to 8000. That target could be achieved with a forward P/E of 20 and forward earnings at $400 per share, up 60% from an estimated $250 per

Ed Yardeni

The Economic Week Ahead: May 20 - 24

May 18, 2024 2 min read paid

The week ahead is a light one for economic reports. The focus is mostly on the housing sector, which is showing signs of bottoming if not recovering. Meanwhile, we will continue to focus on Dr. Copper, the metal with a PhD in economics. We watch the price of copper as an indicator of global economic activity, which seems to be improving though the price of oil has yet to confirm

Ed Yardeni

DEEP DIVE: Consumers Running Out of Excess Saving. Will They Drop Or Continue To Shop?

May 17, 2024 4 min read paid

Bears have been growling since mid-2022 that the US consumer will soon be “tapped out” of the excess savings accumulated during the Covid-19 fiscal stimulus spree from 2020 to 2021, forcing them to rein in spending. Consumers also may soon have maxed out their credit cards, according to this gloomy narrative. Consider the following: (1/4) Sure enough, two San Francisco Fed economists in a May 3 post observed that

Ed Yardeni

Dr Ed's Video Webcast 5/16/24

May 16, 2024 1 min read paid

Today, we look at cracks in the story that consumers are cracking. Crack proponents expect consumers to start saving more and spending less because they’ve depleted their excess saving from the pandemic years. We expect personal saving rates to stay low and consumer spending to stay high as Baby Boomers, done with paying college tuitions and mortgage loans, spend their sizable nest eggs. (Many apparently are buying big-ticket items

Ed Yardeni

Bad News About Goods Is Good News For Bonds & Stocks

May 16, 2024 2 min read paid

The Dow is flirting with 40,000 currently, confirming that good news is good news and bad news is also good news for the stock market these days. That's because the bad news is also good news for the bond market. On balance, the news is that inflation is moderating and the economy is growing. Yesterday's April CPI report confirmed that inflation remains on course to

Ed Yardeni

Inflation's Puzzle Pieces Painting Bullish Picture

May 15, 2024 2 min read paid

The S&P 500 rose to a new record high of 5308.15 following today's economic numbers. It could easily reach our yearend target of 5400 well ahead of schedule! For now, we are sticking with this target, as well as 6000 for 2025 and 6500 for 2026. That's consistent with our Roaring 2020s scenario (60% subjective probability). If the market continues its near-vertical ascent,

Ed Yardeni

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