Ed Yardeni

Inflation: China Is Killing It

Dec 18, 2023 2 min read paid

What have we learned about inflation over the past year? One of the main reasons that the US doesn't need to have a recession to bring down inflation is that China is having the recession for us. China's property bubble has burst, and the deflationary consequences are far greater and more global than those following the bursting of similar bubbles in Japan during the late 1980s

Ed Yardeni

Market Call: Investors Broadening Their Horizon

Dec 17, 2023 2 min read paid

The current bull market started during October of last year. Since then, the bears have been warning that it was a rally in a bear market. That's because most of them expected a recession, and many of them still do. In addition, they've observed that the rally has been narrowly led by the MegaCap-8. The rest of the stock market seemed to be comatose. Our view

Ed Yardeni

The Economic Week Ahead: December 18 - 22

Dec 17, 2023 2 min read paid

On Wednesday, at his presser, Fed Chair Jerome Powell sounded more dovish. So bond and stock prices continued to rally on expectations that the Fed might cut the federal funds rate three times in 2024 by 75bps in total. On Friday, NY Fed President John Williams pushed back by saying, "We aren't really talking about rate cuts right now." More Fed officials will weigh in on

Ed Yardeni

DEEP DIVE: The Fed - Tightening Or Merely Normalizing?

Dec 15, 2023 3 min read paid

Based on November’s employment report released on Friday, we can safely conclude that there is still no sign of an impending recession. The Godot recession is still a no-show. Our soft-landing (a.k.a. rolling recession) scenario remains intact, as it has since early last year. The diehard hard landers are still expecting a recession, as they have been since the Fed started to tighten in early 2022. But

Ed Yardeni

Bond & Stock Prices In Mini Meltup Over Soft Landing

Dec 14, 2023 2 min read

Investors are obviously relieved that the economy may be on a sustainable soft-landing path and might avoid a recession (again) in 2024. They are especially relieved that Fed Chair Jerome Powell recently implied that he and his colleagues are relieved about this too and are talking more dovish now: (1) Waller. For example, two weeks ago, Fed Governor Christopher Waller, in a November 28 speech titled, "Something Appears to

Ed Yardeni

Dr Ed's Video Webcast 12/14/23

Dec 14, 2023 1 min read paid

The economy has proven resilient, defying all the reasons it shouldn’t be, to which diehard hard landers still cling. We expect that it will remain resilient and that inflation will continue to fall to the Fed’s target (a.k.a. “immaculate disinflation”). In this scenario, the Fed won’t be rushing to ease and won’t ease by much. The Fed’s policy stance is perhaps better cast

Ed Yardeni

Stock & Bond Prices Flying With The Fed's Doves

Dec 13, 2023 3 min read paid

Today's Summary of Economic Projections (SEP) released by the FOMC after the committee's meeting was dovish. As a result, bond and stock prices continued their Santa Claus rallies that started at the beginning of November. The most important change in the latest SEP from the previous one during September is that the federal funds rate is projected to fall in 2024 to 4.6% rather than

Ed Yardeni

S&P 500 Earnings At Record High

Dec 12, 2023 2 min read paid

Yippee! S&P 500 operating earnings per share rose to a record high in Q3, for the first time since Q2-2022, and its 4.6% y/y increase was the first such gain in four quarters (chart). Forward earnings rose to another record high during the December 7 week, suggesting the same for actual earnings during Q4. The just-ended earnings recession was very mild, with three back-to-back quarters of

Ed Yardeni

Continue To Underweight Commodities & Emerging Markets In Global Portfolios

Dec 11, 2023 2 min read

The global economy is growing, but at a slow pace. Much of the weakness is attributable to the recessions in China and Europe. US economic growth is slowing from Q3’s rapid pace. Much of the weakness is structural in China but cyclical in the US and Europe. The latter two are likely to grow in 2024, but China will probably remain weak. This implies that commodities and emerging markets

Ed Yardeni

A Christmas Market For The Bull? S&P 500 At 6000 In 2025?

Dec 10, 2023 3 min read paid

Christmas is in two weeks. This year's Santa Claus rally started early, i.e., on October 27. Will it last through Christmas? Will the rally continue through the end of this year, and maybe through the end of 2024 or even 2025? We think so. In our November 3, 2022 Morning Briefing, we wrote that “we think the S&P 500 bottomed on October 12 and see

Ed Yardeni

The Economic Week Ahead: December 11 - 15

Dec 10, 2023 2 min read paid

The big event of the week will be the FOMC meeting (Tue & Wed) followed by Fed Chair Jerome Powell's presser (Wed @ 2:30 pm). December's Summary of Economic Projections (SEP) will be released along with the Dot Plot after the meeting. The markets have most likely fully discounted what Powell will say and what the SEP and Dot Plot will show. Powell will say that

Ed Yardeni

DEEP DIVE: Construction Is Booming!

Dec 8, 2023 3 min read paid

The US economy has been remarkably resilient in the face of the Fed’s aggressive tightening of monetary policy since early last year. One of the sectors that accounts for that resilience is the construction industry. In the past, rising interest rates always depressed construction, which exacerbated the resulting recessions (Fig. 1 and Fig. 2). This time, the weakness in residential construction has been offset by relatively strong private nonresidential

Ed Yardeni

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