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

Good News on Inflation & Jobs Today

May 14, 2024 2 min read paid

Ed Yardeni

The Blob Keeps Growing. So Why Aren't Bond Yields Soaring?

May 13, 2024 2 min read

The federal deficit narrowed a bit to $1.63 trillion over the 12 months through April (chart). However, over the same period, the US Treasury had to raise $2.63 trillion by issuing marketable securities, which now total a record $26.9 trillion. The Treasury had to borrow more than the deficit to replenish its checking account at the Fed, which was down to almost zero last June. The blob

Ed Yardeni

Market Call: Sharp U-Turn

May 12, 2024 2 min read paid

The S&P 500 bottomed most recently on April 19 at 4967.23, rising to 5222.68 on Friday. That's very close to its record high of 5254.35 on March 28. That's a very sharp U-turn! It's getting closer to our 5400 end-of-year target and it is only May. Stock prices rallied as the Q1 earnings reporting season delivered better-than-expected results (chart)

Ed Yardeni

The Week Ahead: May 13 - 17

May 12, 2024 3 min read

The week ahead is jampacked with economic indicator releases. The big ones are for inflation, retail sales, and production. They may be somewhat stagflationary on balance, showing inflation remains too high while economic growth is slowing. Nevertheless, we still expect to see inflation moderate with solid economic growth over the rest of this year. Here are a few observations on this week's key indicators: (1) CPI. The Cleveland

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

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

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

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

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