Inflation

Regional Surveys Suggest Weak M-PMI

Oct 31, 2022 1 min read

Bonds and stocks might rally tomorrow if the M-PMI is as weak as suggested by the regional business surveys conducted by five of the 12 regional Federal Reserve Banks. The average of the five composite indexes dropped deeper into negative territory during October (chart). The average of the new orders indexes remained near recent negative readings, while the average for the employment indexes remained solidly positive. All three are highly

Ed Yardeni

MegaCaps, ECB & ECI

Oct 25, 2022 1 min read

History shows that the Santa Claus rally usually starts during October. This year, the S&P 500 had a terrible September, falling 9.3%. Since the end of that month through today's close, the index is up 7.6%. It could be tough sledding for Santa over the rest of this week. After the close, Google missed earnings as YouTube's ad revenue disappointed. In addition,

Ed Yardeni

The Economic Week Ahead, October 24-28

Oct 22, 2022 1 min read paid

The Q3 earnings reporting season will get most of the attention this week from equity investors. Fortunately, we all get a break from the "Federal Open Mouth Committee" until November 4! But we will all be thinking about how the FOMC might react to this week's stats.

Ed Yardeni

Rolling Inflation & Remarkable Reversal Day

Oct 13, 2022 2 min read

Today's reversal in stock and bond prices from down big to up big, following the release of September's hotter than expected CPI report, has been quite remarkable. It's head spinning action. The day isn't over, but shorting the markets on bad inflation news just turned a bit more risky. We've been making the case that the US economy has been

Ed Yardeni

Labor Shortages Depressing Small Business Owners

Oct 11, 2022 2 min read paid

Today, the National Federation of Independent Business (NFIB) released its September survey of small business owners. They are about as depressed as they have ever been. That’s not because their sales are terrible. Rather, they can’t find enough workers to expand their businesses. So they’ve had to raise both the wages they pay and the prices they charge. However, September’s survey suggested that inflationary pressures are

Ed Yardeni

Supply Chain Problems Are Abating

Oct 9, 2022 1 min read paid

Supply-chain bottlenecks are easing. The parts you’ve been waiting for should arrive shortly. The Federal Reserve Bank of New York compiles a monthly Global Supply Chain Pressure Index (GSCPI) (chart below).It shows that global supply chain pressures decreased in September, marking a fifth consecutive month of easing. The September decline was quite broad-based. The GSCPI’s ytd movements suggest that global supply chain pressures are beginning to fall

Ed Yardeni

The Economic Week Ahead, October 10-14

Oct 8, 2022 1 min read

Monday is Columbus Day and the bond market will be closed. But stock investors can start the week worrying about September's PPI (Wed.) and CPI (Thu.). Both should confirm that they peaked earlier this year, but the moderation in inflation in both may not be enough to stop the Fed from concluding that more rate hikes are needed to subdue inflationary pressures. The PPI may show more moderation

Ed Yardeni

Good News Bears

Oct 7, 2022 1 min read paid

The good news is that the S&P 500 rose 1.5% this past week. The bad news is that it gave back almost all of the rally that occurred during the first two days of the week and is only 1.5% above the bear market's low of last Friday. This week showed that bad (good) economic news is good (bad) for the stock market. Monday

Ed Yardeni

The Fed Is Too Hawkish

Oct 6, 2022 2 min read

Stock prices were beat down today by three downbeat and hawkish Fed officials (Fed Governor Lisa Cook, San Francisco Fed President Mary Daly, and Atlanta’s Raphael Bostic). They all repeated the Fed's party line: Inflation is too high and the Fed must continue to raise interest rates to bring it down. They reiterated what Fed Chair Jerome Powell said at his September 21 presser. He mentioned the

Ed Yardeni

Fed Wants To See Fewer Job Openings

Oct 4, 2022 1 min read paid

It's been a great October so far for bond and stock investors. Last week's pivot by the Bank of England seems to have convinced investors that the Fed now must give more weight to financial stability, which means that the current monetary tightening cycle might end sooner rather than later.

Ed Yardeni

The Bond Vigilantes: They're Baaaack!

Sep 26, 2022 1 min read

The Bond Vigilantes are back. They were last active during the 1980s and early 1990s. They've been mostly lying low since then. That's partly because inflation remained remarkably subdued from the mid-1990s through 2020. Furthermore, in response to the Great Financial Crisis and then the Great Virus Crisis, central banks kept the Bond Vigilantes in check with ZIRP, NIRP, and QE. [1] No more: They'

Ed Yardeni

The Economic Week Ahead, September 26-30

Sep 25, 2022 1 min read

The blackout period is over for the members of the Federal Open Mouth Committee. This week, we can expect that many of the Fed's talking heads will repeat the hawkish remarks made by Fed Chair Jerome Powell during his presser last Wednesday, i.e., monetary policy needs to be more restrictive to bring down inflation. The week ahead is also jam packed with economic indicators: (1) Consumers &

Ed Yardeni

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