Eric Wallerstein

Will The Fed Join The Rate-Cutting Pack Of Central Banks?

Jun 6, 2024 2 min read

US stocks rose to record highs on Wednesday. European stocks did the same today after the ECB lowered its official interest rate to 3.75%, down from a record 4.00%, where it has been since September 2023 and the first cut since 2019. Leading the rate-cutting pack of the major central banks was the People's Bank of China, which lowered its prime rate last year on August

Ed Yardeni
Eric Wallerstein

Charging to New Highs

Jun 5, 2024 3 min read paid

The S&P 500 rose to yet another record high today, once again led by semiconductor stocks, in particular, by Nvidia (chart). The chipmaker just joined the $3 trillion dollar market-cap club along with Microsoft and Apple. The long line to buy the company's GPU chips keeps getting longer. It will have a 10-for-1 stock split on Friday. Perversely, the bulls are also charged up by the

Ed Yardeni
Eric Wallerstein

Is The Fed Put Back?

Jun 4, 2024 3 min read paid

The financial markets seem to believe that the Fed Put is back. The recent batch of weaker-than-expected economic indicators raised the number of expected 25bps cuts in the federal funds rate (FFR) from 2 to 3 over the next 12 months (chart). That's according to the basis-point spread between the 12-month FFR futures and the actual FFR divided by 25bps. Investors must be confident that inflation is getting

Ed Yardeni
Eric Wallerstein

Goods Economy Still On The Ropes

Jun 3, 2024 3 min read paid

A growth recession is still rolling through the goods sector. Real consumer spending on goods has been flat at a record high since early 2022. We expect that spending on services, technology, and onshoring will keep the economy growing. There's still no stagflation or recession in our forecast. Today's M-PMI report was weaker-than-expected. That followed Friday's weaker-than-expected personal income report with spending on goods

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: June 3-7

Jun 2, 2024 2 min read paid

This week, May's employment report (Fri) is likely to be the most important one. We expect the labor market cooled a bit last month, tempering wage growth but not signaling a looming employment-led recession. Less profit margin pressure from wage inflation should boost company earnings, while the solid jobs market should continue to fuel consumer spending. If so, that's bullish for stocks. Here’s what we’

Ed Yardeni
Eric Wallerstein

DEEP DIVE: US Economy Is Less Interest Rate Sensitive

May 31, 2024 6 min read paid

US Economy I. Banks Versus Nonbanks. The resilience of the US economy has been impressive over the past two years in the face of the Fed’s dramatic tightening of monetary policy. Nevertheless, there are still a few hardcore hard-landers predicting that the economy either is already in a recession or soon will be. They’re convinced that there are long and variable lags between restrictive monetary policy and its

Ed Yardeni
Eric Wallerstein

Bonds Weighing On Stocks

May 29, 2024 2 min read paid

Yesterday, Minneapolis Fed President Neel Kashkari told CNBC that he wants to see "many more months of positive inflation data" before he's ready to cut rates. He also didn't rule out a hike. Fixed-income investors are starting to realize that this is the new party line from the Fed. Earlier this year, we argued that there was no reason for the Fed to rush

Ed Yardeni
Eric Wallerstein

Dr Ed's Video Webcast 5/29/24

May 29, 2024 1 min read paid

Geopolitical events can shake up the stock market, sometimes providing buying opportunities. The current geopolitical landscape is unsettled and unsettling, with potentially seismic ramifications on several fronts and lots of uncertainties: Is Putin’s call for negotiations with Ukraine a nonstarter? Is it even real? Are US efforts at brokering peace in the Middle East progressing toward that end or is that notion wishful thinking? Does the heightened pitch of

Ed Yardeni
Eric Wallerstein

Sunny Economy, Gloomy Dispositions

May 28, 2024 2 min read paid

Inflation is the number one economic concern among consumers today. It's also moderated significantly since the summer of 2022; the prices of durable goods are even deflating a bit. The labor market remains strong, boosting consumer spending. Stocks are at all-time highs. Yet, according to a recently released Fed survey, only 22% of Americans think the US economy is in good or excellent shape, down from 50% before

Ed Yardeni
Eric Wallerstein

The Economic Week Ahead: May 28 - 31

May 27, 2024 3 min read

The economic indicators released during the shortened week ahead should confirm that economic growth remains solid and that inflation is continuing to moderate. Here's what we're watching this week: (1) PCED. The Cleveland Fed’s Inflation Nowcasting model shows headline and core PCED rose 2.68% and 2.74% y/y (0.27% and 0.23% m/m) last month (chart). That would be the lowest

Ed Yardeni
Eric Wallerstein

DEEP DIVE: Dow 40,000 And Counting

May 24, 2024 4 min read paid

The Baby Boomers have been heavily influenced by a couple of Spocks—Dr. Benjamin Spock and Spock of Star Trek, played by Leonard Nimoy. Dr. Spock was a pediatrician who wrote Baby and Child Care (1946). It became the unofficial bible of child rearing as millions of mothers read it and raised their Baby Boom children according to the book’s advice. In the 1960s and 1970s, conservatives blamed Dr.

Ed Yardeni
Eric Wallerstein

Will Nvidia Trump The Fed?

May 23, 2024 2 min read paid

Yesterday's FOMC minutes confirmed that Fed officials are in no rush to lower the federal funds rate (FFR) and some are considering the possibility that they might have to raise it if inflation stalls above the Fed's 2.0% target. The 2-year Treasury yield is back up to 4.94% implying one 25bps rate cut over the next 12 months. So stocks sold off on fears

Ed Yardeni
Eric Wallerstein

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