Ed Yardeni

DEEP DIVE: Global Economy Muddling Along To New Record-High Stock Prices

Mar 10, 2024 4 min read paid

The UK and Japan are in recessions. Germany is on the edge of falling into a recession. China’s property bubble has burst, which is depressing the overall economy and weighing on other Asian economies. The weakness in the global economy is evident in commodity prices. The S&P Goldman Sachs Commodity Price index is down 31% from its March 8, 2022 peak (Fig. 1 below). The CRB raw

Ed Yardeni

Market Call: The Front-Cover Curse Already?

Mar 10, 2024 2 min read paid

The front cover of this week's Barron's shows the horns of a bull apparently charging through a big white sheet of paper. Only the horns are visible in the picture. Usually a bull appearing on the front cover of a major financial magazine rings alarm bells for contrarians, who view such events as major sell signals. However, the editors of Barron's might have dodged

Ed Yardeni

The Economic Week Ahead: March 11-15

Mar 9, 2024 2 min read paid

The coming week starts with a couple of key inflation indicators. Both were probably boosted by rising gasoline prices. The retail pump price is up 9.1% since the last week of January. This bounce might have boosted February's reading on the year-ahead expected inflation rate in the FRBNY consumer expectations survey (Mon). It did so, though only slightly, in a similar series from February's SCR

Ed Yardeni

New Risk: Powell Stoking Risk-On Trades

Mar 7, 2024 2 min read paid

Fed Chair Jerome Powell's dovish congressional testimony yesterday and today stoked the hot trades in the financial markets from Nvidia to bitcoin to gold: "We're waiting to become more confident that inflation is moving sustainably at 2%. When we do get that confidence, and we're not far from it, it'll be appropriate to begin to dial back the level of restriction,

Ed Yardeni

We Have Nothing To Fear But Nothing To Fear

Mar 6, 2024 2 min read

Fed Chair Jerome Powell was very reassuring during his congressional testimony today. He said the economy is fine, inflation is moderating, and interest rates have probably peaked. He also said the Fed is likely to lower interest rates, but won't rush to do so: "We believe that our policy rate is likely at its peak for this tightening cycle. If the economy evolves broadly as expected, it

Ed Yardeni

Dr Ed's Video Webcast 3/6/24

Mar 6, 2024 1 min read paid

Bouts of geopolitical or domestic political strife usually don’t derail the US stock market. Investors tend to divorce politics from their decision making, counting on wars to end and gridlock to keep regulation-happy lawmakers in check. Only when geopolitical problems disrupt supply chains, trade, and global energy markets or when domestic partisanship prevents the government from functioning do these considerations matter to companies and their investors. We’re closely

Ed Yardeni

Two of the Magnificent 7 Get Shanghaied

Mar 5, 2024 2 min read paid

Two of the Magnificent-7 are less magnificent. That's because China is in a recession and Chinese consumers are buying fewer of Apple's iPhones and Tesla's EVs. These two companies are also facing more competition from Chinese producers of similar consumer goods. So, they are down 11.6% and 27.3% ytd. Also down by 5.0% ytd is Alphabet, which is deemed to be

Ed Yardeni

China: Pushing On A String?

Mar 4, 2024 2 min read paid

In recent weeks, the Chinese government has introduced several measures to prop up the stock market. This week, the government was expected to announce measures aimed at boosting the economy. In a surprise announcement today, a spokesman said China’s Premier Li Qiang will not brief the media at the close of this year’s annual parliamentary meeting, which begins on Tuesday in Beijing. The government may be concerned that

Ed Yardeni

Market Call: Dalio's Bubble Trouble Meter

Mar 3, 2024 3 min read

In a February 29 LinkedIn post, Ray Dalio wrote that his bubble gauge for the overall stock market is at a mid-range reading of 52 (chart). He concluded that the stock market "doesn't look very bubbly." His meter is based on six inputs that signal whether speculative activity is too widespread. So it is currently indicating rational exuberance rather than irrational exuberance, which typically fuels a

Ed Yardeni

The Economic Week Ahead: March 4 - 8

Mar 2, 2024 2 min read paid

The week ahead is jampacked with employment indicators. We expect that January's JOLTS report (Wed) and February's employment report (Fri) will confirm that the labor market remains strong. That's based on weekly initial unemployment claims remaining just north of 200,000 in recent weeks and February's consumer confidence survey showing that 41.3% of respondents agreed that jobs are plentiful (chart). Bad

Ed Yardeni

DEEP DIVE: The Roaring 1990s vs The Roaring 2020s

Mar 1, 2024 8 min read paid

Since the start of the 2020s, we’ve been comparing the current decade mostly to the 1920s and the 1970s. However, the S&P 500’s 42.3% meltup since October 12, 2022 to a new record high on February 23 has us considering whether another period represents a possible analogous scenario, i.e., the second half of the 1990s. We see parallels between conditions then and now that

Ed Yardeni

Goldilocks Without The Bears

Feb 29, 2024 2 min read

Every now and then, the economy is widely described as being a "Goldilocks" economy. Like Goldilocks' preferred porridge, it is not too hot and not too cold, but just right and bullish for stocks. We often agreed with that assessment, but we also noted that three bears did show up at the end of this cautionary tale. Once again, the economy is just right for Professor Goldilocks,

Ed Yardeni

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