Stock Market

Going Fishing For Stock & Bond Market Bottoms

Nov 15, 2022 2 min read

Last Thursday’s lower-than-expected CPI inflation rate for October was greeted with a huge rally by stock and bond investors. They continued to discount the possibility that inflation has peaked and is heading lower following today’s PPI report for October. As a result, they seem to be concluding that the Fed’s monetary policy tightening cycle will be peaking sooner rather than later, with a terminal federal funds rate

Ed Yardeni

Ups & Downs Of Inflation

Nov 15, 2022 2 min read paid Featured

We certainly aren’t out of the inflation woods yet, but we do seem to be heading in the right direction to get out of this dark forest. Let’s review the latest batch of inflation indicators, starting with two disappointing ones: (1) Inflation expectations uptick. On Monday, the Federal Reserve Bank of New York released its October survey of inflation expectations of Americans. It headed in the wrong way,

Ed Yardeni

S&P 500's Two Great Performances

Nov 13, 2022 2 min read paid Featured

The latest bear market in stocks has had a couple of very impressive bear market rallies. The S&P 500 jumped 17.4% from June 16 through August 16 from 3666 to 4305. It is up 11.8% from October 12 through Friday's close from 3577 to 3956. It's interesting to compare the fall's great performance so far with the summer's:

Ed Yardeni

Stock Valuation Multiples May Have Bottomed

Nov 12, 2022 1 min read Featured

There are no guarantees in life. Outcomes are usually contingent on a number of other outcomes, and so on. This certainly applies to the forward P/Es of the major S&P stock indexes shown below. If we continue to see better-than-expected inflation prints in coming months, like October's CPI on Thursday, then these valuation multiples most likely bottomed on October 12, when the S&P

Ed Yardeni

Put Today In A Bottle and Cork It

Nov 10, 2022 2 min read paid

Yes, we know: Today's amazing stock market rally might have been just a bear market rally. It might have been a short-covering rally that reflected the extreme pessimism among investors and speculators. Just yesterday, the market dropped sharply on a couple of big earnings misses, a meltdown in crypto, and disappointment among some investors that the red wave was more like a red ripple, though the Republicans are

Ed Yardeni

Stock Market Sentiment Readings Mostly Bearish

Nov 10, 2022 2 min read paid

The Investors Intelligence Bull/Bear Ratio remained below 1.00 this week for the eighth consecutive week, holding at 0.96 for a third week, after falling steadily from 1.15 in mid-September to 0.57 four weeks ago—which was the lowest since March 2009 (chart). Bullish sentiment dipped for the second week to 35.2% after increasing the prior two weeks from 25.0% (the fewest bulls since

Ed Yardeni

Third Year of Presidential Cycle Is Bullish

Nov 8, 2022 1 min read paid Featured

We previously observed that the stock market has a strong tendency to perform well following midterm elections irrespective of the actual election outcome. Since 1942, during each of the 3-month, 6-month, and 12-month periods following each of the 20 midterm elections, the S&P 500 was up on average by 7.6%, 14.1%, and 14.9%. Of the 60 observations, only three of them were negative. But none

Ed Yardeni

Is Gridlock In Washington Bullish for Stocks?

Nov 7, 2022 2 min read

It is widely believed that political gridlock is bullish for stocks in the US. The market is happiest when our constitutional system of checks and balances is working. Therefore, a divided government is preferable to a unified government when one party controls the White House and both houses of Congress. So a widely expected "red wave" tomorrow should be bullish for stocks. We have previously observed that the

Ed Yardeni

What Is The Stock Market Discounting Today?

Oct 28, 2022 1 min read paid

The stock market is ripping this morning despite disappointing earnings reported by some of the S&P 500's MegaCaps this week. Why? Consider the following: (1) Today's inflation reports (for the ECI and PCED) suggest that it is peaking, though not for sure. (2) Inflation-adjusted consumer spending continues to move higher albeit slowly and led by services as spending on goods has flattened in recent

Ed Yardeni

Stocks Float As 2-Year Yield & Dollar Sink

Oct 26, 2022 1 min read paid

The S&P 500 bottomed this morning around 10 a.m. about 1% below yesterday's close on earnings misses by Alphabet and Microsoft. But it quickly popped back up to the surface, so it now is floating slightly above yesterday's close as of 11 a.m. The trading day isn't over, but there is an interesting dynamic playing out in the markets: (1)

Ed Yardeni

MegaCap-8 and a Trading Call Update

Oct 24, 2022 1 min read Featured

The MegaCap-8 are still the largest yachts in the ocean. These eight stocks currently account for 23% of the market capitalization of the S&P 500 index and 46% of the S&P 500 Growth index (chart). This week, five of them--Microsoft, Alphabet, Meta, Apple, and Amazon--are set to report their earnings. (The other three are Netflix, Nvidia, and Tesla.) Their managements will provide insights into how the

Ed Yardeni

Mid-Term Elections Tend To Be Consistently Bullish

Oct 20, 2022 1 min read

In Tuesday's QuickTakes, we observed that since 1928, the S&P 500 fell 1.1% on average during September, by far the worst performance of any month. October, November, and December were up 0.5%, 0.6%, and 1.4% on average. We concluded: "Yes, Virginia, there really is a Santa Claus rally. Apparently, it tends to be even more likely during mid-term election years."

Ed Yardeni

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