Eric Wallerstein

The Economic Week Ahead

Sep 29, 2024 3 min read paid

The week ahead is jampacked with employment indicators. The Fed started a new monetary easing cycle on September 18, cutting the federal funds rate by 50bps. The question now is how hard will it press on the gas pedal? Given last week's cooler-than-expected inflation print, the Fed will most likely retain its bias for easier monetary policy unless the labor market data are surprisingly strong. The consensus currently

Ed Yardeni
Eric Wallerstein

Market Call: October Is Here. What Could Possibly Go Wrong?

Sep 29, 2024 3 min read paid

We asked the very same question at the start of September, and were hard pressed to come up with an answer. We concluded: "So perhaps, the path of least resistance will continue to drive stock prices higher. We are still expecting a yearend rally to 5800 on the S&P 500, but it could already be underway." The S&P 500 rose 1.6% during September

Ed Yardeni
Eric Wallerstein

Revisions Show US Economy Is Still Flying High

Sep 26, 2024 3 min read

Hard luck for the hard-landers today. Today's GDP report was full of upward revisions: (1) GDP versus GDI. Some of the hard-landers expected GDP to be revised lower after a large gap between GDP (which measures output) and Gross Domestic Income (GDI) (which measures economic activity via wages and profits) emerged over the past few quarters. Over time, GDI closely tracks GDP, but discrepancies tend to be revised

Ed Yardeni
Eric Wallerstein

When American Consumers Are Depressed, They Go Shopping

Sep 25, 2024 3 min read paid

Consumer confidence has been relatively depressed for the past couple of years according to the Consumer Confidence Index (CCI) and Consumer Sentiment Index (CSI), which are based on surveys conducted by The Conference Board and the University of Michigan. The Consumer Optimism Index, which we calculate as the average of the CCI and CSI remains down and out (chart). The CCI tends to be more sensitive to employment, while the

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 9/25/24

Sep 25, 2024 1 min read paid

The Fed is starting a new easing cycle to avoid a recession that we don’t see coming, based on concern about labor market deterioration that we don’t see occurring. Today, Dr. Ed compares and contrasts the world according to the Fed with the world according to our team, explaining the thinking behind both. Notably, the Fed is risking its credibility by easing without regard for election results, as

Ed Yardeni
Eric Wallerstein

Global Monetary Fire Hose To The Rescue!

Sep 24, 2024 3 min read paid

Chinese stocks rose 4.1% overnight thanks to the flurry of easing measures from its central bank (chart). The Peoples Bank of China lowered bank reserve requirements, cut interest rates, and will provide leverage to brokers to buy stocks. Propping up stocks with government funding sounds more like panic than proactivity to us. But the skinny of the matter is that the Fed's 50bps rate cut last week

Ed Yardeni
Eric Wallerstein

A Safe Haven In A World Of Troubles

Sep 23, 2024 3 min read paid

The US is a tranquil island in a sea of troubles. Geopolitical turmoil poses a threat to the continued prosperity of the US. Like Hamlet, American foreign policymakers need to answer the following question: "Whether 'tis nobler in the mind to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of troubles, and by opposing end them?" In the US, the

Ed Yardeni
Eric Wallerstein

Market Call: The Next Surprise

Sep 22, 2024 3 min read

So far, September isn't living up to its bad reputation for the stock market now that the S&P 500 and the DJIA are at record highs. At the start of the month, on September 2, we asked, "What Could Possibly Go Wrong?" We wrote: "We are hard pressed to find what could possibly go wrong in September. So perhaps, the path of least

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: September 23-27

Sep 22, 2024 3 min read paid

This week's economic indicators should confirm our view that the Fed cut the federal funds rate (FFR) by 50bps (rather than 25bs) last week just as the economy is rebounding from its recent soft patch. Fed Governor Chris Waller's Friday comments on CNBC suggest even previously hawkish FOMC members are now onboard Chair Jerome Powell's easing train. Meanwhile, regional manufacturing surveys (Tue & Thu)

Ed Yardeni
Eric Wallerstein

Raising Odds Of A Meltup

Sep 19, 2024 4 min read paid

We've focused on three scenarios since the start of the decade: a 1920s-style Roaring 2020s, a reprise of the 1990s stock market meltup, and a rerun of That '70s Show with geopolitical shocks causing oil prices and inflation to spike. We haven't had to change our subjective probabilities of 60/20/20 for these three alternative outlooks. However, Fed Chair Jerome Powell is forcing us

Ed Yardeni
Eric Wallerstein

Powell & Co. Slams The Pedal To The Metal

Sep 19, 2024 3 min read

Wow, the Fed lowered the federal funds rate (FFR) by 50bps yesterday and the economy is already responding. Jobless claims fell and two regional business surveys strengthened in September, while the Coincident Economic Index rose to a new record high, though in August! We are kidding, of course. But perhaps the economy didn't need to be stimulated so much. It appears Fed officials got their soft landing but

Ed Yardeni
Eric Wallerstein

Powell Declares Mission Accomplished

Sep 18, 2024 3 min read

The Fed cut the federal funds rate (FFR) by 50bps today. This marks the end of the Fed’s monetary policy tightening cycle that started during March 2022, which was aimed at bringing inflation back down to 2.0% even if that caused a recession. Inflation isn't quite there yet, but it is close enough. So today, in his presser, Fed Chair Jerome Powell reiterated that the Fed&

Ed Yardeni
Eric Wallerstein

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