Ed Yardeni

Another Happy Day For Bond & Stock Investors

Nov 14, 2023 2 min read paid

As inflation continues to descend, bond and stock prices are ascending. Today's lower-than-expected CPI inflation report confirms that inflation is continuing to moderate. So the 10-year Treasury bond yield fell to 4.44%, boosting the valuation multiples of stocks. The S&P 500 is now up 9.2% above its recent correction low on October 27 (chart). Our yearend target of 4600 for the index could be

Ed Yardeni

Pumping More Oil & Less Gasoline

Nov 13, 2023 2 min read

Fed officials often have said that they want to make sure that inflation is “well anchored.” In other words, they want to see that inflationary expectations are low. So it was a bit unsettling that Friday’s release of the consumer sentiment survey for the first half of November showed the one-year expected inflation rate jumped from 3.2% in September to 4.2% in October and 4.4% in

Ed Yardeni

Stock Prices Are Jumping Again

Nov 12, 2023 3 min read paid

After the stock market closed on Friday, Moody’s reduced the US government's credit rating from “stable” to “negative” citing large fiscal deficits. The ratings agency said in a statement that “continued political polarization” in Congress raises the risk that lawmakers will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability.” Will bond and stock prices tumble on Monday again

Ed Yardeni

The Economic Week Ahead: November 13 - 17

Nov 11, 2023 2 min read paid

The third week of the month tends to be action packed with key economic indicators. This week's batch should confirm that inflation remains on a moderating trend and that the economy continues to grow albeit at a slower pace than during Q3. Unfortunately, on Monday, we will be reminded that this Goldilocks scenario has at least one big flaw, i.e., the widening federal deficit. In addition, we

Ed Yardeni

DEEP DIVE: Captain America!

Nov 10, 2023 5 min read paid

US Economy: Superhero. Like Captain America, the American economy seems to have an indestructible shield. The Fed has raised the federal funds rate aggressively by 525bps since March 2022 with the aim of tightening financial conditions to slow the economy and to raise the unemployment rate with the ultimate aim of bringing down price and wage inflation (Fig. 1 below). Yet real GDP jumped 4.9% (saar) and rose 2.

Ed Yardeni

Powell Is Still Calling The Shots

Nov 9, 2023 2 min read paid

The bid-to-cover ratio is the dollar value of bids compared with the dollar value of debt offered. Falling bid-to-cover ratios indicate less robust interest from investors. Yields climbed today after a weak auction of $24 billion in 30-year Treasuries with demand for the debt at 2.24 times the bonds on sale (chart). That helped to push stock prices lower today, snapping the longest winning streaks for the Nasdaq and

Ed Yardeni

Weakening Global Economic Growth Is A Mixed Bowl Of Nuts

Nov 8, 2023 2 min read paid

We are still aiming for 4600 on the S&P 500 before the end of this year. That's only a 5.0% increase from today's close. Heck, the S&P 500 was up 5.9% just last week. However, that was clearly a combination of a short-covering rally in both the bond and stock markets. It was also a buying panic in the bond

Ed Yardeni

Dr Ed's Video Webcast 11/8/23

Nov 8, 2023 1 min read paid

Last week brought epic rallies in both the stock and bond markets. We think the stock market’s correction is over and that the S&P 500 is back on track to end the year at 4600. All 11 sectors gained ground last week, many enjoying their best week in nearly a year. As for the bond market rally that carried the 10-year Treasury bond yield down to a

Ed Yardeni

Oil's Slippery Slope

Nov 7, 2023 2 min read paid

The NYMEX nearby futures price of a barrel of crude oil peaked this year at $93.68 on September 27. Notwithstanding the war that started between Israel and Hamas on October 7, the price is down $16.27 from that peak to $77.42. That’s even though Saudi Arabia and Russia reduced their exports during the summer and maintained their cuts through yearend. One reason for this development is

Ed Yardeni

SLOOS Shows Looser Credit Conditions

Nov 6, 2023 1 min read

The Fed may not be as almighty as Fed officials believe. The FOMC has raised the federal funds rate aggressively by 525bps since March 2022. Their goal was to slow economic growth to subdue inflation. Yet the economy grew rapidly during Q3 and the unemployment rate has remained below 4.0% since February 2022. Nevertheless, inflation has moderated significantly since last summer (chart). Inflation seems to be to be mostly

Ed Yardeni

Market Call: Spotting Reindeers

Nov 5, 2023 2 min read paid

Last week was a wild one for sure in the bond and stock markets. The bond yield plunged and stock prices soared led by SMidCaps and interest-rate sensitive sectors and industries. Fears that the bond yield might continue to surge above 5.00% evaporated in response to weaker-than-expected employment indicators and a broadening consensus that the Fed is done raising the federal funds rate. The bond yield plunged 41bps from

Ed Yardeni

The Economic Week Ahead: November 6 - 10

Nov 4, 2023 2 min read paid

It's a light week for US economic indicators. However, the FOMC's blackout period is over, so there should be lots of erudite remarks coming from the members of the Federal Open Mouth Committee. They are likely to be less hawkish following last week's batch of somewhat weak economic indicators--though the batch wasn't weak enough to cause more than a tiny decline in

Ed Yardeni

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