Market Call

Market Call: The Winds Of War

Apr 14, 2024 2 min read paid

The S&P 500 is down 2.5% from its record high of 5254.35 on March 29 (chart). Its 1.5% drop on Friday was widely attributed to disappointing earnings reports from the big banks that day. Undoubtedly, the market also reacted to warnings from the White House that Iran would attack Israel within a couple of days, which happened Saturday afternoon EST. The S&P 500

Ed Yardeni

Market Call: Dalio's Bubble Trouble Meter

Mar 3, 2024 3 min read

In a February 29 LinkedIn post, Ray Dalio wrote that his bubble gauge for the overall stock market is at a mid-range reading of 52 (chart). He concluded that the stock market "doesn't look very bubbly." His meter is based on six inputs that signal whether speculative activity is too widespread. So it is currently indicating rational exuberance rather than irrational exuberance, which typically fuels a

Ed Yardeni

Market Call: Meta's Universe

Feb 4, 2024 3 min read paid

Meta is leading the stock market to where it has never gone before, i.e., to new record highs. Its stock price rocketed 20.3% on Friday, adding $204.5 billion to its market value, the biggest one-day gain by any US company in history. Industry analysts scrambled to raise their earnings forecasts for the company following Thursday's after-the-close earnings call with management (chart). As a group, the

Ed Yardeni

Market Call: Between Iran & A Hard Place

Jan 28, 2024 3 min read paid

Geopolitical events and crises rarely influence Fed policymaking. This time it might be different. The war that began on October 7 between Israel and Hamas is turning into a regional conflict in the Middle East. On Sunday, Iran-backed militants killed three US service members and wounded many more during an unmanned aerial drone attack in northeastern Jordan near the Syrian border. This latest escalation increases the risks of disruptions to

Ed Yardeni

Market Call: S&P 500/400/600 Are Flying With The Blue Angels

Jan 15, 2024 2 min read paid

Our Blue Angels framework allows us to visualize the stock market equation P = P/E * E in one chart, where P is the stock price index, E is the forward earnings of the index, and P/E is the forward valuation multiple. Forward earnings is the time-weighted average of analysts' consensus earnings expectations for the current year and the coming year. Our analysis of the Blue Angels is that

Ed Yardeni

Market Call: Charging Into 2024

Dec 25, 2023 2 min read paid

Merry, happy, joyful, and jolly are just some of the adjectives used to describe this time of year. We hope your holiday season has been merry, happy, joyful and jolly so far. It sure has been for stock investors. The fun started more than a year ago on October 12, 2022 when the bear market bottomed. It has been a powerful bull market since then. Consider the following: (1) Here

Ed Yardeni

Market Call: Monitoring Geopolitical Risk In the Middle East

Dec 3, 2023 2 min read paid

The Santa Claus rally is about to be tested again by the prospects of a regional war in the Middle East. The Gaza War started on October 7, when Hamas attacked Israel. Yet both bond and stock prices have rallied since late October as investors bet that it would stay localized. So far, it has. Indeed, even the price of a barrel of brent crude oil has declined since then

Ed Yardeni

Market Call: Winning Streak For The Bulls

Nov 26, 2023 2 min read paid

We expect that the Santa Claus rally in stock prices that started on October 27 will continue over the rest of this year. It should be driven by the realization that inflation can and is moderating without a recession. That can only happen if productivity growth is making a comeback as we expect. China's economic woes are also an important source of "immaculate disinflation" for the

Ed Yardeni

Market Call: Spotting Reindeers

Nov 5, 2023 2 min read paid

Last week was a wild one for sure in the bond and stock markets. The bond yield plunged and stock prices soared led by SMidCaps and interest-rate sensitive sectors and industries. Fears that the bond yield might continue to surge above 5.00% evaporated in response to weaker-than-expected employment indicators and a broadening consensus that the Fed is done raising the federal funds rate. The bond yield plunged 41bps from

Ed Yardeni

Market Call: Investors Are Spooked

Oct 29, 2023 2 min read paid

Halloween is on Tuesday. Investors have been spooked since early August. They are still spooked by the widening federal deficit, partisan gridlock in Washington, sticky inflation, Fed hawkishness, and a world of trouble. They've been reacting to good economic news as though it is bad news since inflation is less likely to moderate if the economy is strong. We don't agree because we think that productivity

Ed Yardeni

Market Call: Stop The World —We Want To Get Off!

Oct 15, 2023 2 min read

On December 23, 1776, Thomas Paine famously opined: "These are the times that try men's souls." He did so in an article titled, "The Crisis." On Friday, JPMorgan Chase CEO Jamie Dimon kicked off Q3's earnings season with a stern warning to investors: “Now may be the most dangerous time the world has seen in decades,” he wrote in the company’s

Ed Yardeni

Market Call: Latest Mideast War Raises Geopolitical Risks

Oct 7, 2023 2 min read paid

Hamas launched a coordinated surprise attack on Israel today. The timing suggests that Iran's mullahs instigated their surrogates in Gaza, hoping to disrupt the peace negotiations between Israel and Saudi Arabia. Israel will undoubtedly launch a massive counter0ffensive. The question is whether Hezbollah will open up a second front on Israel's north. Geopolitical crises in the Middle East have usually caused oil prices to rise and

Ed Yardeni

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