Ed Yardeni

Both Analysts & Investors Are Optimistic

Jul 5, 2023 2 min read paid

In the stock market equation P = P/E x E, the consensus expected forward earnings of industry analysts determines earnings (E), while investors determine the forward earnings multiple (P/E) that they are willing to pay for E. Industry analysts remain optimistic on S&P 500 forward revenues which rose to another record high during the June 29 week (chart). They've also stopped lowering their consensus expectations

Ed Yardeni

Running of the Bulls

Jul 5, 2023 1 min read paid

Are there too many bulls? The Bull/Bear Ratio (BBR) compiled by Investors Intelligence jumped to 3.00 during the July 4 week, up from 2.69 the previous week (chart). It is the highest reading since the bull run from March 23, 2020 through January 3, 2022. The bull then got gored during the bear market through October 12, 2022. During the latest week, the bullish percentage rose to

Ed Yardeni

Construction Is Booming Despite Housing Recession

Jul 3, 2023 1 min read paid

The single-family housing market has been in a recession since early 2022. Housing is among the most interest-rate sensitive sectors of the economy. It tends to go down first when the Fed is raising interest rates, setting the stage for a broader economy-wide recession. So far, it's been different this time. Total construction--including residential, nonresidential, and public--rose to yet another record high in May (chart). That's

Ed Yardeni

Market Call: Melting Up?

Jul 2, 2023 2 min read paid

Growing confidence in the resilience of the economy has been one of the main reasons why the stock market has been so strong since October 12, with the S&P 500 up 24.4%, the Nasdaq up 32.4%, and the S&P 500 Transportation index up 21.0% since that date. On Friday, the S&P 500 closed up 1.22% at 4450.38 (chart). That&

Ed Yardeni

The Economic Week Ahead: July 3-7

Jul 2, 2023 2 min read paid

The first week of every month tends to be jampacked with employment and PMI releases. All eyes will be on June's employment report at the end of the week. The recent upturn in initial unemployment claims suggests that the labor market may be cooling off a bit. Thursday's jobless claims should confirm that. However, that same day, May's JOLTS report should show that job

Ed Yardeni

Market Not Fazed By Bearish Fed and Nvidia Talk

Jun 29, 2023 2 min read paid

The stock market held up remarkably well yesterday despite Fed Chair Jerome Powell's warning that "there's more restriction coming" because the labor market remains too strong. He suggested that 25-bps rate hikes are still on the table for the next two meetings of the FOMC. Powell spoke during a monetary policy session in Sintra, Portugal, which is famous for its huge crashing ocean waves

Ed Yardeni

DEEP DIVE: Baby Boomers Retiring With $75 Trillion In Net Worth

Jun 28, 2023 4 min read paid

When the Fed started to raise interest rates aggressively last year, there was lots of speculation that it would cause a recession. Housing certainly fell into a recession as housing starts plunged 25.7% from a peak of 1.80 million units (saar) during April 2022 to a trough of 1.34 million units during January and April 2023 (Fig. 1). Consumer spending adjusted for inflation has been on a

Ed Yardeni

The Promised Land

Jun 27, 2023 2 min read paid

The permabears will have to postpone their imminent recession yet again based on today's batch of US economic indicators, which suggests that our "rolling recession" is turning into a "rolling expansion." The housing market seems to be recovering nicely from its recession, which started early last year. The manufacturing sector is showing signs of bottoming, while nondefense capital goods orders excluding aircraft rose to

Ed Yardeni

Eurozone Is In a Recession

Jun 26, 2023 2 min read

Greetings from Dubrovnik! My wife and I started our vacation in Croatia last Thursday. We will be back in the USA this coming Thursday. We started our trip in Zagreb for one day and Split for three days. Now we are in Dubrovnik for the rest of our stay. Croatia is beautiful and attracts lots of tourists this time of year. Tourism is the biggest industry here but it is

Ed Yardeni

Market Call: Fundamentals Good. Technicals Bad.

Jun 25, 2023 2 min read paid

In our previous QT (The Week Ahead), we observed that this week's economic indicators should be good for the stock and bond markets, confirming that the economy is still growing while inflation is continuing to moderate. Industry analysts seem to agree with us as their S&P 500 forward earnings turned more optimistic on the outlook for S&P 500 earnings recently (chart). However, in coming

Ed Yardeni

The Economic Week Ahead: June 26-30

Jun 24, 2023 2 min read paid

May's personal income will be released on Friday. It is likely to be the week's most important economic indicator. It should show that consumers' incomes continue to grow, while inflation is still moderating. We know that our Earned Income Proxy for private wages and salaries in personal income rose to a record high in May (chart). We also expect to see that receipts of unearned

Ed Yardeni

China's Post-Lockdown Recovery Fizzles

Jun 24, 2023 1 min read paid

Since April, we have been observing that China’s economic recovery over the six months since the government lifted pandemic lockdown restrictions in early December has been surprisingly weak. The country’s total imports have been flat since late 2021 through May of this year (chart). The rallies in the price of copper and in the China MSCI stock price index late last year and early this year have fizzled

Ed Yardeni

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