Ed Yardeni

For the Bulls, The Suspense Is Hard to Bear

Aug 15, 2023 2 min read members

The Bond Vigilantes kept the suspense going today. They closed the 10-year Treasury bond yield at 4.22% (chart). It's widely feared that if it rises above 4.25% (i.e., last year's high), the next stop could be 4.50% and even 5.00% if the yield curve disinverts with the long end rising up to meet the short end. The stock market has been

Ed Yardeni

Bond Vigilantes Running Into Some Resistance

Aug 14, 2023 2 min read paid

The 10-year US Treasury bond yield continues to run into resistance around 4.25%, which was last year's high (chart). The bond bears led by the Bond Vigilantes would like to see the yield rise well above that level to demonstrate that they are unhappy with the government's profligate fiscal policies. The bond bulls--including us, for now--see the current level as an attractive one if inflation

Ed Yardeni

Market Call: The Bond Vigilantes Are Saddling Up

Aug 13, 2023 3 min read paid

As we anticipated, the S&P 500 has dropped to its 50-day moving average (dma) on Friday (chart). It is down 2.7% from its bull market high of 4588.96 on July 31. Leading the way down has been the S&P 500 Information Technology sector (-7.0%). Weighing on this sector's valuation multiple has been the jump in the 10-year Treasury yield above 4.

Ed Yardeni

The Economic Week Ahead: August 14-18

Aug 12, 2023 2 min read paid

This week is packed with July's composite cyclical indicator releases which should ease fears that economic growth might be too strong given that real GDP is tracking at 4.1% (saar) for Q3 currently. That's quite a reversal from a few months ago when there were widespread fears of a recession. Consider the following: (1) The YRI Earned Income Proxy for private-industry wages and salaries in

Ed Yardeni

Inflation Remains On Downward Trend

Aug 10, 2023 2 min read paid

The FOMC can take the rest of the year off. The federal funds rate is now restrictive enough to bring inflation down without causing a recession, in our opinion. The banking crisis in March, Moody's recent downgrade of several regional banks, and the Fed's latest Senior Loan Officer Opinion Survey all confirm that credit conditions are tightening. The economic data confirm that the economy remains resilient

Ed Yardeni

DEEP DIVE: Here Are Five Bearish Arguments That Haven't Worked So Far

Aug 9, 2023 4 min read paid

Let’s revisit our upbeat response to the most frequently cited reasons to be worried about a recession: (1) Falling leading indicators and M-PMI. The Index of Leading Economic Indicators (LEI) peaked at a record high during December 2021 (Fig. 7). It is down 9.4% since then through May. The LEI correctly anticipated the previous eight recessions with an average lead time of 12 months. We’ve previously shown

Ed Yardeni

Dr Ed's Video Webcast 8/9/23

Aug 9, 2023 1 min read paid

This is ironic: Just when the most widely anticipated recession of all times is no longer widely anticipated, July’s employment report suggests that the Index of Coincident Economic Indicators is weakening. … With the consensus now elbow-to-elbow with us in the no-recession camp, our contrarian instincts are on full alert. The alternative scenarios of two prominent financial market prognosticators may give investors pause and keep the stock market treading water

Ed Yardeni

China Exporting Deflation to US

Aug 8, 2023 1 min read

The US doesn't have to experience a recession to bring inflation down if China's export prices are falling because China is already in a recession. Consider the following: (1) This evening we learned that China's CPI fell 0.3% y/y during July, the first such drop since February 2021. The PPI fell 4.4% over the same period (chart). (2) The CPI inflation

Ed Yardeni

Lots Of Busy Bees At Our Hive

Aug 8, 2023 2 min read

We've been busy bees today as a slew of economic indicators have entered our hive. On balance, they show that the global economy is weak, while the US economy is strong, though the US banking system has some stress cracks. Consider the following: (1) Moody's downgrades the banks. First and foremost, stock prices fell, while bond prices rose today on Monday's news (after the

Ed Yardeni

DEEP DIVES: Inflation, Symmetry & Shockwaves

Aug 7, 2023 2 min read paid

Inflation tends to be a symmetrical phenomenon. It tends to come down as quickly or as slowly as it went up when measured on a y/y basis. We can see this consistent pattern in the CPI inflation rate for the US since 1921 (Fig. 1). The inflation symmetry has been particularly pronounced in the goods-producing sector (Fig. 2). That’s because goods prices tend to respond quickly to changes

Ed Yardeni

Market Call: September Is Coming!

Aug 6, 2023 2 min read paid

The S&P 500 is down 2.4% from its bull market high of 4588.96 on July 31 through Friday's close (chart). It ran into resistance at the top end of its bullish channel, which could take the index to 4400-5000 by the end of this year. We are sticking with 4600, suggesting that there isn't much upside for the rest of this year.

Ed Yardeni

The Economic Week Ahead: August 7-11

Aug 5, 2023 2 min read paid

Everyone hold your breath: The next BIG inflation number will be July's CPI (Thu). It could be troublesome for bonds and stocks. That's if the Cleveland Fed's Inflation Nowcasting is on track. It is updated each business day. On August 4, it projected that the headline and core CPI inflation rates will both be up 0.4% m/m. The comparable y/y inflation

Ed Yardeni

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