Deep Dive

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

DEEP DIVE: Record High Earnings Giving Stock Market A Lift

Aug 16, 2024 3 min read paid

There’s no sign of an imminent recession in the latest earnings reporting season. Joe notes that more than 90% of the S&P 500 companies have reported their earnings for Q2. Collectively, S&P 500 operating earnings per share (EPS) rose 10.9% y/y during the quarter to a record high of $60.19 (Fig. 1 below and Fig. 2 below). Here’s more related happy

Ed Yardeni
Eric Wallerstein

DEEP DIVE: The Fed Faces Some Challenges

Jul 28, 2024 3 min read paid

The financial markets and most economists seem to agree that the Fed’s next move will be to cut the federal funds rate (FFR) by 25bps following the September 17-18 meeting of the FOMC. However, there is still a debate about whether restrictive monetary policy operates with a “long and variable” lag, thus requiring more rate cuts this year to avert a recession later this year or in 2025. If

Ed Yardeni
Eric Wallerstein

DEEP DIVE: A Positive Outlook For Q2 Earnings Reporting Season

Jul 12, 2024 4 min read paid

Joe has been tracking the quarterly earnings forecast for S&P 500 companies collectively each week since the series started in Q1-1994. The typical playbook: Industry analysts cut their estimates gradually until reality sets in during the final month of the quarter, when some companies warn of weaker results. The combination of falling forecasts for companies that have underperformed earlier expectations, steady forecasts for those holding good news close

Ed Yardeni
Eric Wallerstein

DEEP DIVE: AI Hype Is Hyper

Jul 4, 2024 3 min read paid

Determining when an investment trend has run its course is more of an art than a science. While we love the productivity-enhancing possibilities that artificial intelligence (AI) offers, the AI phenomenon has many of the hallmarks of an inflating bubble. There are big bucks chasing the AI dream. New kings of industry have been crowned. And the hyperbole is flowing. Let’s take a look at some of the warning

Jackie Doherty
Ed Yardeni

DEEP DIVE: Charging Bull

Jun 29, 2024 7 min read paid

Strategy I: Hoof Marks. Even the bulls are getting trampled by the bull market in stocks. Many investment strategists are scrambling to raise their targets for the S&P 500. At the end of 2022, we predicted that the index would increase 20% from 3839 to 4600 by the end of 2023. It got there by the end of July of that year. We stuck to our target as

Ed Yardeni
Eric Wallerstein

DEEP DIVE: Winning Streaks Usually Don't Last Forever

Jun 21, 2024 10 min read paid

TAMED I: Technical Analysis Of Macro Economic Data. Over the past two years, the hard landers had innumerable theories and charts to explain why higher interest rates would undoubtedly plunge the economy into a recession. Now, the diehard hard landers are again insisting that their long-held recession call will be proven correct soon. Others among them say we’re already in a recession. So far, these forecasts have been wrong.

Ed Yardeni
Eric Wallerstein

DEEP DIVE: Inflation - Why the Long Face?

Jun 14, 2024 3 min read paid

Among the hottest topics at dinner tables and at corporate boardrooms tables across the country—not to mention election campaign offices—is inflation. The topic of inflation has heated up along with inflation itself but doesn’t seem to be cooling off along with it. The US economy contended with its first significant bout of price pressures since the 1980s after pandemic stimulus measures boosted demand in the face of

Ed Yardeni
Eric Wallerstein

DEEP DIVE: Expecting Record S&P 500 Earnings Ahead

Jun 7, 2024 4 min read paid

Joe reports that the S&P 500 Q1 earnings reporting season is now 98% complete, with 490 companies having issued their results. The 10 companies left to report are: Lululemon Athletica, Bath & Body Works, Brown-Forman, Campbell Soup, J M Smucker, Dollar Tree, Kroger, Autodesk, Broadcom, and Hewlett Packard Enterprise Co. Whatever those 10 firms report shouldn’t significantly change the aggregate results of the 500 companies in the

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

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

DEEP DIVE: Consumers Running Out of Excess Saving. Will They Drop Or Continue To Shop?

May 17, 2024 4 min read paid

Bears have been growling since mid-2022 that the US consumer will soon be “tapped out” of the excess savings accumulated during the Covid-19 fiscal stimulus spree from 2020 to 2021, forcing them to rein in spending. Consumers also may soon have maxed out their credit cards, according to this gloomy narrative. Consider the following: (1/4) Sure enough, two San Francisco Fed economists in a May 3 post observed that

Ed Yardeni
Eric Wallerstein

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