Ed Yardeni

Dr Ed's Video Webcast 1/24/24

Jan 24, 2024 1 min read paid

Now that investors’ recession fears have abated, they’re focusing on company fundamentals again, so good corporate news is having a stronger bullish impact. Additionally, investors are excited about the potential of AI and the prospect of Fed easing. The possible result: an exuberant meltup phase, which might already be under way and might become irrational. … Unless Fed Chair Powell stresses that he’s in no rush to ease, a

Ed Yardeni

Huge Negative Wealth Effect In China

Jan 23, 2024 2 min read

China might be in a recession or going into one. That’s a controversial statement since real GDP rose 5.2% y/y during Q4-2023, according to the official data from the National Bureau of Statistics of China (NBS). The NBS also reported that industrial production rose 6.8% y/y in December and that inflation-adjusted retail sales increased 7.7% last month (chart). Those are not recession readings. China’

Ed Yardeni

38,000

Jan 22, 2024 2 min read paid

The DJIA rose to a new record high of 38,001.81 today (chart). The DJTA is lagging behind the DJIA and remains below its record high. We are expecting that the DJTA will soon confirm the bullish trend of the stock market by rising to a new record high too. In extended trading, United Airlines rose more than 6% after reporting strong Q4 results. Investors are anticipating that Q4

Ed Yardeni

Market Call: Three Scenarios

Jan 21, 2024 2 min read

We now see three possible historical precedents for the economy, the Fed, and the stock market's performance ahead: (1) The 1920s (with a subjective probability of 60%). This is our base case "Roaring 2020s" scenario. We've been discussing it since the start of the current decade. Our basic premise is that a chronic shortage of labor is forcing companies to use technological innovations to

Ed Yardeni

The Week Ahead: January 22 - 26

Jan 20, 2024 2 min read

The week ahead should be another good one for our "immaculate disinflation" scenario. December's Index of Coincident Economic Indicators (Mon) probably rose to another record high (chart). Payroll employment rose to a new high last month. Real personal income and real business sales of goods probably did the same. Production upticked in December. The Index of Leading Economic indicators has been misleadingly pessimistic since December 2022.

Ed Yardeni

DEEP DIVE: A Very Brief History of Recoveries & Expansions

Jan 20, 2024 2 min read paid

How much longer might the current economic expansion last? That remains a widely disputed question. The debate started between the hard-landers, soft-landers, and no-landers in early 2022, continued in 2023, and now continues in 2024. We remain in the soft-or-no-landing camp. We have a sense of “déjà vu all over again” about this debate. We were among the no-landers for several years following the 2007-08 recession. We even compiled a

Ed Yardeni

Hot Chips

Jan 18, 2024 2 min read paid

Ed Yardeni

What Is Powell Thinking?

Jan 17, 2024 3 min read paid

This question was partially answered yesterday in a speech by Fed Governor Christopher Waller: "This cycle, however, with economic activity and labor markets in good shape and inflation coming down gradually to 2 percent, I see no reason to move as quickly or cut as rapidly as in the past. The healthy state of the economy provides the flexibility to lower the (nominal) policy rate to keep the real

Ed Yardeni

Dr Ed's Video Webcast 1/17/24

Jan 17, 2024 1 min read paid

The runaway inflation of the 1970s was whipped only after Paul Volcker took over as Fed chief, doing the deed but not without precipitating a recession. Powell’s efforts to engineer “immaculate disinflation,” lowering inflation without a recession, have gone well so far, as we’ve been expecting. But the specter of 1970s inflation’s twin peaks must keep him up at nights now that Middle East hostilities raise the

Ed Yardeni

Loose Houthis Can Sink Ships

Jan 16, 2024 2 min read

Chevron CEO Michael Wirth warned yesterday in a CNBC interview that the Red Sea crisis could disrupt oil supplies and quickly push oil prices higher: "So much of the world's oil flows through that region that were it to be cut off, I think you could see things change very rapidly," he said. So what did the price of oil do today? It edged down (chart)

Ed Yardeni

Market Call: S&P 500/400/600 Are Flying With The Blue Angels

Jan 15, 2024 2 min read paid

Our Blue Angels framework allows us to visualize the stock market equation P = P/E * E in one chart, where P is the stock price index, E is the forward earnings of the index, and P/E is the forward valuation multiple. Forward earnings is the time-weighted average of analysts' consensus earnings expectations for the current year and the coming year. Our analysis of the Blue Angels is that

Ed Yardeni

The Economic Week Ahead: January 16-19