Yardeni QuickTakes (Page 153)

Gold Losing Its Shine

Jul 9, 2022 1 min read

Gold hasn't been a good hedge against inflation over the past highly inflationary year. That's not surprising since this precious metal's price is inversely correlated with the 10-year TIPS yield and with the trade-weighted dollar (charts below): (1) The TIPS yield fell to a record low of -1.19% on November 9, 2021. It then moved higher, especially this year, closing at

Ed Yardeni

Goldilocks & the Fed

Jul 8, 2022 1 min read paid

Was today’s June employment release a Goldilocks report? Payroll employment rose 372,000, and wages increased 0.3%—not too hot, not too cold. The problem is that consumer prices have been rising faster than wages for the past year or so. As a result, the purchasing power of our Earned Income Proxy for private wages and salaries in personal income has been significantly eroded by higher prices (chart)

Ed Yardeni

S&P 500 Energy Earnings Still Energetic

Jul 8, 2022 1 min read

The S&P 500 Energy sector has been weak recently, but it is still the only one of the index's 11 sectors with a gain so far this year at 28.0% ytd. Here are a few quick takeaways: (1) The price of a barrel of Brent crude oil has been volatile around $100 recently and looking toppy. The outlook has become extremely controversial. On July 1,

Ed Yardeni

Chips Are Cheap Again

Jul 7, 2022 1 min read paid

One of the worst performing S&P 500 industries so far this year has been Semiconductors. It is down 36.9% ytd as its forward P/E dropped 44% from 25.0 to 14.0. Meanwhile forward earnings rose 13.1% ytd to a record high. (See our "Blue Angels" chart below).

Ed Yardeni

Recession: To Be Or Not To Be?

Jul 6, 2022 2 min read

The latest batch of leading economic indicators suggests that several coincident economic indicators might soon begin to fall. So we now place the odds of a mild recession at 55% (up from 45%), making it our base-case outlook. Let’s review what we have so far for June’s Index of Leading Economic Indicators (LEI) and May's Index of Coincident Economic Indicators (CEI): (1) While it is

Ed Yardeni

Is the Labor Shortage Depressing the Economy?

Jul 6, 2022 1 min read paid

Might this be the first economic downturn attributable to a labor shortage? That shortage is weighing on output. It is also driving up wages, but the resulting wage-price spiral is eroding consumers' purchasing power as prices are rising as fast as wages. The solution is productivity, but it remained very weak during H1-2022. Consider the following: (1) Today's JOLTS report showed 11.3 million job

Ed Yardeni

The MegaCap-8’s Impact on the S&P 500

Jul 5, 2022 2 min read

The MegaCap-8 stocks were also the Magnificent-8 during 2020 and most of 2021. Their businesses greatly boomed during the pandemic when many people worked, schooled, and entertained at home. The MegaCap-8 include Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, NVIDIA, and Tesla. During H1-2022, they lost a lot of their magnificence and market capitalization, and weighed heavily on the S&P 500. Let’s review their

Ed Yardeni

The Dollar, Commodities, Bonds & Stocks

Jul 5, 2022 1 min read paid

What's weighing on the price of oil? We are watching the age-old adage at work: The best cure for high oil prices is high oil prices, which have depressed the global economy, as evidenced by the recent freefall in the price of copper and now the price of a barrel of crude oil. Another contributor to the weakness in oil prices and other commodity prices is the

Ed Yardeni

US Remains Energy Independent

Jul 5, 2022 2 min read

In America we just celebrated our Independence Day. We should also celebrate that we've been energy independent since 2019. So why are gasoline prices so high? Consider the following: (1) The latest data show that during May, the US produced 19.6mbd of crude oil and petroleum products, while petroleum products supplied (a measure of total demand) was 19.7mbd. (2) US crude oil field production rose to

Ed Yardeni

Dr Ed's Video Webcast 7/5/22

Jul 5, 2022 1 min read

The US economy is probably heading into a mild recession, recent indicators suggest. We now see real GDP contracting by 1.9% this year. Below is exclusive early access to Dr Ed's Webcast for paid members. This post and video will open to the public on a later date. The good news: The recession should be over next year and should slow the rate of inflation in H2-

Ed Yardeni

S&P 500 Gives Back 2021's Gain

Jul 3, 2022 1 min read

The S&P 500 fell 20.6% during H1-2022 (table below). That's on the edge of a bear market , which is defined as a 20%+ decline. Here are a few more quick takeaways: (1) Of the 11 S&P 500 sectors, only Energy was up, and several industries were down by 30% or more: Energy (29.2), Utilities (-2.0), Consumer Staples (-6.8), Health

Ed Yardeni

The Economic Week Ahead 7/5/22

Jul 3, 2022 2 min read paid

Last week’s economic calendar was chock full of recessionary indicators. The Atlanta Fed’s GDPNow is tracking Q2’s real GDP at -2.0% currently, following Q1’s actual decline of -1.6%. It increasingly looks like the economy has entered a mild recession. However, this week’s indicators, with the focus almost entirely on consumers, aren't likely to be definitive on this matter: (1) Demand for

Ed Yardeni

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