Eric Wallerstein

Geopolitical Risks Abound

Aug 26, 2024 3 min read

The world is getting more dangerous. That doesn't seem to be having any impact on the US stock market. The S&P 500 is less than 1% below its July 16 record high, while the equal-weighted version of the index is at a record high (chart). The biggest risk to the bull market in stocks is a recession, according to most strategists. We don't share

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: August 26-30

Aug 25, 2024 3 min read

This week will include the first clues on the economy's performance in August. We're expecting to see confirmation of ongoing labor market strength in the month's consumer confidence survey (Tue) and initial unemployment claims (Thu). Some of August's improvement should be a bounce back from July's weather-depressed economic activity, which may be reflected in July's personal income release

Ed Yardeni
Eric Wallerstein

Market Call: Did Powell Just Pour Gasoline On Stock Market's Fire?

Aug 25, 2024 3 min read paid

Fed Chair Jerome Powell's speech at Jackson Hole on Friday was unambiguously dovish, as we observed in that day's QT. It was also unambiguously bullish for the stock market because it confirmed widespread expectations that September's cut in the federal funds rate is in the bag and will be followed by several more cuts. However, the stock market may have discounted most of these

Ed Yardeni
Eric Wallerstein

DEEP DIVE: Artificial Intelligence: The Good, the Bad & the Ugly

Aug 24, 2024 5 min read paid

Artificial Intelligence: Good vs Evil. There’s a lot of controversy over AI. The passion of those for and against its propagation is almost religious in nature, with zealots and heretics. The zealots believe that AI is a revolutionary technological innovation that will quickly transform our lives for the better, a good development for humanity. A few of these believers do concede that it has the potential to be evil,

Ed Yardeni
Eric Wallerstein

Powell Confirms Fed's Pivot To Rate Cuts. Doesn't Push Back Against Market Expectations.

Aug 23, 2024 3 min read paid

Fed Chair Jerome Powell was dovish in his Jackson Hole speech today. He didn't hedge. He didn't push back against market expectations of several rate cuts ahead as we anticipated he might. He wasn't more dovish than the market, but he didn't utter any hawkish views whatsoever to alter the market's dovish expectations for several rate cuts (chart). Powell unambiguously

Ed Yardeni
Eric Wallerstein

US Economy Still On Bullish Track

Aug 22, 2024 3 min read

Stock traders took some profits today. They were probably nervous that Fed Chair Jerome Powell will be less dovish tomorrow than the markets are about the outlook for rate cuts beyond 25bps in September. We've been less dovish than the markets since mid-June because we've been more bullish on the economy and the labor market than the consensus. Today's economic releases showed the US

Ed Yardeni
Eric Wallerstein

Are Grocery Stores Price Gouging?

Aug 21, 2024 3 min read paid

Today, Target CEO Brian Cornell said that there's no room for price gouging in a super competitive business like retail. He was responding to accusations by Vice President Kamala Harris that grocers are inflating their prices. As the Democratic candidate for President, she proposed the first ever ban on "corporate price-gouging" in the food and grocery industry. She also pledged last Friday to come after "

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 8/21/24

Aug 21, 2024 1 min read paid

Last week saw unfounded US recession fears and global financial market jitters go poof as quickly as they arrived. Dr. Ed examines what the markets were overreacting to when they beat a hasty retreat and the subsequent developments that set investors straight. … Weather was the reason for much of the weakness in July’s economic indicators, suggesting that August’s data may surprise on the upside and that Fed officials

Ed Yardeni
Eric Wallerstein

Don't Sweat Tomorrow's Payroll Revisions

Aug 20, 2024 3 min read paid

Tomorrow, the Bureau of Labor Statistics (BLS) will release its Quarterly Census of Employment and Wages (QECW) for the 12 months ended March 2024. These data are used to revise previous payroll employment reports. They come with a lag, but are generally accepted to be more accurate than the initial monthly releases, which were already revised twice. The initial 12-month revisions can be large, recently having swung by more than

Ed Yardeni
Eric Wallerstein

Reports of Dollar's Demise Are Greatly Exaggerated

Aug 19, 2024 3 min read paid

The strength of the US dollar has been a key feature of the post-pandemic bull market. Approaching Jackson Hole, the greenback has been falling. It is now up just 0.5% ytd versus 4.6% seven weeks ago (chart). Is this the start of a new weaker dollar regime? Unlikely. The DXY is still up 10% over the past three years, and it wouldn't surprise us if the

Ed Yardeni
Eric Wallerstein

Market Call: Bungee Jump

Aug 18, 2024 3 min read

Last week's economic data confirmed that consumers are still consuming, the labor market is fine, small business owners are more optimistic, and inflation is still moderating. On Friday, at Jackson Hole, Wyoming, Fed Chair Jerome Powell is likely to reiterate that the economy is performing well and that inflation is getting closer to the Fed's 2.0% target. He is likely to support market expectations that

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: August 19-23

Aug 18, 2024 3 min read paid

The week ahead is light on economic data. However, there will be lots of news coming out of Jackson Hole, Wyoming from Thursday through Saturday as many of the world's central bankers gather for their annual meeting near the Grand Teton mountain range. Most important will be Fed Chair Jerome Powell's speech on Friday at 10:00 a.m. (EST). Many other central bankers from the

Ed Yardeni
Eric Wallerstein

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