Yardeni QuickTakes (Page 112)

Uncle Sam Downgrade Raises Caution Flag

Aug 2, 2023 2 min read paid

In yesterday's QT, we noted that the 10-year Treasury bond yield was back just over 4.00% and that this might "weigh on stock valuations, especially of the MegaCap-8." That's what happened today. Yesterday, after the close, Fitch Ratings downgraded US government debt from AAA to AA+ for all the reasons that have been concerning in the bond market for years. The

Ed Yardeni

Dr Ed's Video Webcast 8/2/23

Aug 2, 2023 1 min read paid

We’re raising the subjective odds we assign to the no-landing economic scenario through year-end 2024 (by 10% to 85%) and lowering our odds of a hard landing (by 10% to 15%). But we’re keeping close tabs on hard-landers’ latest arguments. Today, we summarize the main ones and give our rebuttals. … The biggest issue dividing the two camps is the outlook for consumer spending, representing over

Ed Yardeni

Time To Get Some Worry Beads?

Aug 1, 2023 2 min read paid

Today's batch of economic indicators was relatively upbeat. June's JOLTS report showed that jobs remained plentiful. July's M-PMI suggests that the rolling recession experienced by goods producers and distributors may be bottoming. June's construction spending rose to yet another record high (chart). The Atlanta Fed's GDPNow tracking model estimates that real GDP rose a whopping 3.9% during Q3.

Ed Yardeni

July was Red Hot

Jul 31, 2023 2 min read paid

July was hotter than usual. We aren't referring to the weather but rather to the 3.1% increase in the S&P 500. That compares to an average increase of 1.7% for the month since 1928, with an average gain of 4.9% for the 58 up years and an average 3.2% loss during the 38 down years (chart). So it is fair to say

Ed Yardeni

The Economic Week Ahead: July 31-August 4

Jul 30, 2023 2 min read paid

The M-PMI is released on the first business day of each month. The NM-PMI is released two days later. We expect that the former (Tue) will show that the rolling recession in the goods-producing sector is bottoming, while the latter (Thu) should show that the service-providing sector is still expanding. We already have four of the regional business surveys conducted by five FRB district banks. The

Stephen Rybka

Dow Theory On Bullish Track

Jul 29, 2023 2 min read paid

The S&P 500 closed at the bull market's high of 4582.22 on Friday. Chart technicians continue to ring the alarm bells. The index is 11.9% above its 200-dma, which is 4094.1 (chart). Sentiment is too bullish. Breadth is too narrow. Valuations are stretched. The bears are capitulating. Run for the hills! Yet, last week, the Dow Theory flashed a bright green signal.

Ed Yardeni

The Bull Deserves A Rest

Jul 27, 2023 2 min read

The bull market's winning streak ended today. The Dow closed higher for 13 straight sessions through Wednesday, its longest series of positive closes since 1987. It was down 0.67% today. The Dow's longest-ever winning streak was 14 sessions, set in 1897, according to S&P Dow Jones Indices. The S&P 500 closed at 4537.41 today after hitting a bull market

Ed Yardeni

The Urge To Merge

Jul 26, 2023 2 min read paid

When the banking crisis occurred during March, we concluded that the Fed's emergency liquidity response would contain the problem. We predicted that investors soon would be scrambling to determine which regional banks might be acquired rather than worrying about which of them might be seized by banking regulators. We argued that the higher costs of regulation that would soon be imposed on the smaller banks would force the

Ed Yardeni

Dr Ed's Video Webcast 7/26/23

Jul 26, 2023 1 min read paid

The urban office real estate niche of the commercial real estate market is increasingly distressed owing to the work-from-home trend escalated by Covid. But the problem is contained to the office districts of big cities, and we expect the fallout to be contained too: Sellers of distressed properties will take losses but find buyers, exposed banks will further increase loan loss provisions, increased M&A activity among

Ed Yardeni

Global Economy Is In A Soft Landing

Jul 26, 2023 1 min read

The flash S&P global PMIs for July suggest that the global economy continues to avoid a hard landing, while falling into a soft landing. That's a relatively bullish scenario for stocks and bonds since it suggests that inflation should continue to moderate around the world allowing the major global central banks to stop tightening their monetary policies. Let’s review the data: (1) US PMIs. The

Ed Yardeni

July's Consumer Confidence Up As Jobs Remain Plentiful

Jul 25, 2023 1 min read paid

Among the earliest monthly indicators of the US jobs market is the consumer confidence survey conducted by the Conference Board. July’s survey came out on Tuesday. The Consumer Confidence Index rose smartly this month, with solid gains in both its current conditions and expectations components (chart). Furthermore, consider the following: (1) The survey’s “jobs plentiful” series edged up to 46.9% (chart). That’s down from readings of

Ed Yardeni

Rolling Recession Rolling Over Commercial Real Estate (CRE)

Jul 24, 2023 2 min read paid

The rolling recession is rolling over the commercial real estate market (CRE), especially the market for urban office buildings. In our opinion, the challenges facing that market are serious but shouldn’t cause an economy-wide credit crunch and a recession. The Fed’s May 2023 Financial Stability Report included a review of the CRE credit market. The report observes: “The shift toward telework in many industries has dramatically reduced

Ed Yardeni

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