Ed Yardeni

S&P 500: Smooth Sailing to Another 2023 High

Jun 1, 2023 2 min read paid

Hooray! The US government won't default on its debts. There are plenty of jobs. Unit-labor-cost inflation is moderating. The banking crisis is abating. The recession is still a no-show. Earnings were better than expected during Q1 and are probably bottoming during the current quarter. The FOMC likely will pause its rate hiking for at least one meeting. AI will boost productivity if it doesn't kill us.

Ed Yardeni

Sitting Bull

May 31, 2023 2 min read paid

The bull market seems to be taking a rest. The S&P 500 has stalled just below 4200 since the start of May (chart). That's good considering that several vocal bears predicted that the S&P 500 would fall back down towards its October 12 low during the first half of this year. However, those who recommended going away in May (as the old adage says)

Ed Yardeni

Two Known Knowns About the Economy

May 31, 2023 2 min read paid

Investors are confused: Is the economy strong or is it weak? The answer is "Yes." The labor market is strong, but the manufacturing side of the economy is weak. We've all known that for a while. Today's indicators confirmed what we know. On the weak side today was the ISM Chicago Business Survey as evidenced by the drop in its Purchasing Managers Index (PMI)

Ed Yardeni

Dr Ed's Video Webcast 5/31/23

May 31, 2023 1 min read paid

Why is economic growth seemingly defying gravity, or at least the gravitational pull of the Fed’s tightening measures over the past year and change? It’s not that the rules of business-cycle physics are defunct. Rather, the pandemic has added new forces to the equation, with distortive effects. Eight unusual forces are acting as shock absorbers to keep the economy from sinking into the widely expected recession. Today, we

Ed Yardeni

May's Regional Business Surveys Remained Weak

May 30, 2023 1 min read paid

A federal debt ceiling deal is in the works. The stock market yawned. The bond market rallied. Interest rates fell even though the deal would allow Treasury Secretary Janet Yellen to issue lots of Treasuries to replenish her department's checking account. Perhaps the bond market responded to the Dallas Fed's May regional business survey released today, which was weak. So were the other four regional business

Ed Yardeni

Market Call: Still Climbing the Wall of Worry

May 29, 2023 2 min read paid

The latest bull market, which started on October 12, when the previous bear market ended, may be on course to be among the most hated bull markets in history. That's because it started with historically high P/Es. In the past, valuations offered compelling opportunities at the end of bear markets. Most despicable is that the bull has the chutzpah to charge ahead when almost everyone agrees a

Ed Yardeni

The Economic Week Ahead: May 30-June 2

May 29, 2023 2 min read paid

Now that a debt deal is on the verge of becoming a done deal, the markets can focus on economic growth and inflation. This week will be a big one for labor market indicators. May's consumer confidence survey (Tue) will include a series for "jobs plentiful." The latter is highly correlated with the JOLTS report's "job openings" series to be released with

Ed Yardeni

The Economy Is Still Gliding Along

May 28, 2023 2 min read paid

Apparently, the debt ceiling issue has been resolved over the weekend, as we expected. The stock market might rally on Tuesday, but it has been taking the issue in stride focusing more on AI than Washington's political theater. The economy continues to glide calmly as evidenced by Friday's personal income report for April. The Atlanta Fed's GDPNow tracking model raised Q2's real

Ed Yardeni

Expecting a Debt Deal

May 25, 2023 3 min read paid

Our good friend Jim Lucier of Capital Alpha is one of the best Washington watchers we know. He has given us permission to share his latest thoughts on the debt ceiling issue with you. His basic message is that this too shall pass. Here are some of his main points from his commentary today: (1) We think that House Speaker Kevin McCarthy (R-CA) will be able to round up fully

Ed Yardeni

DEEP DIVE: Stocks Discounting Earnings Recovery

May 25, 2023 3 min read paid

The stock market discounts earnings over the next 52 weeks. How do we know this? Most industry analysts provide earnings estimates for the current year and the coming year. They might provide earnings estimates or earnings growth forecasts beyond that period, but investors aren’t likely to have as much confidence in earnings forecasts beyond the next 52 weeks. Of course, industry analysts don’t forecast earnings on a 52-week-ahead

Ed Yardeni

Dr Ed's Video Webcast 5/24/23

May 24, 2023 1 min read

The Fed sought to allay fears of bank runs when it provided backstop funds to banks. Consider the fears allayed—so far, at least. The disintermediation threat hasn’t descended; it hasn’t wrought a credit crunch, a recession, or widespread economic destruction. Now if fears aren’t stoked by further talk of bank runs, maybe, just maybe, the threat will go away. … Also: The high-inflation saga‘s loose ends

Ed Yardeni

Raising Odds of Soft Landing

May 24, 2023 1 min read paid

Beware: Bullish sentiment is improving, which is bearish from a contrarian perspective. On Tuesday, Rick Rieder, who is BlackRock’s chief bond strategist, said “I think the U.S. economy’s in much better shape than people give credit.” That's been our position for a while. In a May 23 report, the strategists at Evercore ISI reiterated that a hard landing is their base case with a 60%

Ed Yardeni

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