Ed Yardeni

Bond Yields Spiraling Downward

Apr 5, 2023 2 min read

What does the bond market know that the equity market doesn't? The yield on the 10-year Treasury is down from 4.25% on October 24, 2022 to 3.29% today. The S&P 500 is up 8.0% over the same period. Bond investors must believe that the banking crisis will soon morph into a credit crunch and a recession, so inflation will continue to fall perhaps

Ed Yardeni

Falling Interest Rates

Apr 4, 2023 2 min read

Interest rates continued to fall today after Jamie Dimon, who is the President, CEO & Chairman of JP Morgan Chase, warned that the banking crisis is "not yet over" and will cause "repercussions for years to come." He did so in his annual letter to stockholders. With all those titles, he must know what he is talking about. He observed that potential losses from held-to-maturity bonds,

Ed Yardeni

OPEC+ Cuts Oil Production

Apr 4, 2023 2 min read paid

Ed Yardeni

Market Call

Apr 3, 2023 2 min read paid

No news is good news. Every day that nothing terrible happens in the banking system is a good day for the stock market. That helps to explain last week's strong rally (up 3.5%) (chart). Yes, but this morning, there's bad news on the energy front as OPEC+ is cutting oil production sending oil prices higher. That's good news for the S&P

Ed Yardeni

DEEP DIVE: Will the Banks Bust the Economy?

Apr 2, 2023 3 min read paid

Banking I: Disintermediation 2.0? The bear case last year was that the Fed would have to tighten monetary policy aggressively because the Fed was behind the inflation curve and had to scramble to catch up. That would cause a recession, which is the only way to bring inflation down, according to the narrative. As a result, valuation multiples would tumble, and so would earnings. That scenario played out well

Ed Yardeni

The Economic Week Ahead: April 3-7

Apr 2, 2023 1 min read paid

Once again, more important than the economic news this week might be if it is another one without bad news from the banks. In any event, it is a big week for employment indicators, which are likely to confirm that the labor market remains relatively strong. February's JOLTS report (Tue) should show that job openings remain plentiful (chart). Jobless claims remain low too. March data for payrolls from

Ed Yardeni

Fed Backstops the Banks

Mar 31, 2023 2 min read

The Fed has the banks' backsides covered. The Fed can't insure deposits, but it can guarantee that the banks have access to plenty of liquidity to meet deposit outflows without having to sell securities from their bond portfolios at a loss as happened to Silicon Valley Bank (SVB), forcing it into receivership on March 10. The banks are required to put up bonds as collateral for their

Ed Yardeni

April Is Coming

Mar 30, 2023 2 min read paid

April is the second best month of the year for the stock market. From 1928 through 2022, the S&P 500 was up 1.4% on average during the month, second only to July's 1.7% average gain (chart). The S&P 500 is up 1.5% since the end of February through today (chart). That's impressive given that Silicon Valley Bank imploded on

Ed Yardeni

Yardeni Press

Mar 30, 2023 1 min read

US stocks could end this year 14% higher because banking turmoil will trigger a Fed pause, veteran investor Ed Yardeni says The S&P 500 could hit 4,600 points by the end of this year, according to Ed Yardeni. The veteran investor turmoil in the US banking sector to lead to the Federal Reserve pausing its rate hikes. "This banking crisis is going to be very well-contained,

Ed Yardeni

Chips Are Hot Despite Recession Fears

Mar 29, 2023 2 min read paid

Semiconductor investors didn't get the recession memo. They have anticipated the industry’s improvement for many months. The S&P 500 Semiconductors industry stock price index has jumped 55.8% from its late 2022 low, as of Tuesday’s close (chart). The index remains 20.9% off of its November 29, 2021 peak. As is often the case in this industry, investors jumped into semiconductor shares before

Ed Yardeni

Dr Ed's Video Webcast 3/27/23

Mar 29, 2023 1 min read paid

The recent banking crisis has heightened fears of a recession. But still the S&P 500 is up ytd—buoyed greatly by the MegaCap-8 stocks. … The SVB debacle hasn’t changed our economic outlook, which pegs the odds of a recession at a relatively high 40%, as we’re not convinced it will lead to a credit crunch that triggers a recession. Below is exclusive early access to Dr

Ed Yardeni

Bad Breadth Again

Mar 28, 2023 1 min read

The ratio of the equal-weighted to market-cap-weighted S&P 500 stock price indexes is an interesting measure of market breadth. It is available daily since 1990 (chart). Based on this limited period, we can see that the ratio tends to rise following recessions and to peak before recessions. It bottoms just before or during recessions. The same pattern seems to apply to this ratio during bull and bear markets

Ed Yardeni

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