Stock Market

S&P 500 Earnings Stalling

Aug 24, 2022 1 min read paid

The forward earnings* of the S&P 500 peaked at a record high in late June, just before the start of Q2's earnings reporting season. Since then industry analysts have been shaving their 2022 and 2023 earnings estimates. As a result, forward earnings has stalled. Let's drill down to the 11 sectors of the S&P 500 (chart below):

Ed Yardeni

The Most Bearish Two Charts In Our Collection

Aug 23, 2022 1 min read

On our website, thousands of our charts are automatically updated as new data become available. The most bearish of the lot are shown below. The first one shows the Fed's holdings of securities versus the S&P 500. The second shows the former versus the forward P/E of the S&P 500. We added a dotted line to track the Fed’s QT2, which ramps

Ed Yardeni

Market Call: Risk Off

Aug 21, 2022 1 min read

The stock market is overbought. Since June 16, the S&P 500 is up 15% including its 1.2% decline last week back to 4228, failing to rise above its 200-day moving average, which was 4306 on Friday. Over the same period, the Nasdaq is up 19% after giving back 2% last week. Meanwhile, the 10-year US Treasury bond yield is up 41bps from a recent low of 2.

Ed Yardeni

Buffett Is Bullish While His Ratio Is Bearish

Aug 20, 2022 1 min read paid

Yesterday, the Motley Fool reported that Warren Buffett's Berkshire Hathaway was on a buying spree during the recent bear market. Apparently, the Oracle of Omaha isn't concerned that his famous Buffett Ratio remains in bearish territory. In a December 2001 Fortune article, Buffett observed that when the ratio of the value of all stocks traded in the US to nominal GNP exceeds 200%, its best to

Ed Yardeni

CFO Put Replaces Fed Put

Aug 19, 2022 1 min read

The Fed Put may be kaput, but the CFO Put is still going gut, as they say in German. Starting in September, the Fed intends to shrink its balance sheet by $95 billion per month. During the first half of 2022, the Fed has remained hawkish, and resisted caving in to the stock market's tightening tantrum. However, Corporate America continues to pour some of its massive cash flow

Ed Yardeni

Bull/Bear Ratio Rebounding

Aug 17, 2022 1 min read paid

Pessimism sells newspapers better than optimism. Pessimism also creates buying opportunities for optimists. Investors are no longer as bearish as they were eight weeks ago. From a contrarian perspective, as we’ve seen just recently, extreme pessimism tends to be bullish, unless the world really does come to an end, in which case, who cares? Here’s a quick update on Investors Intelligence Bull/Bear Ratio (BBR):

Ed Yardeni

TINAC & TICS Update

Aug 16, 2022 1 min read

June's Treasury International Capital System (TICS) was released on Monday. The TICS data tend to confirm our TINAC thesis, i.e., there is no alternative country: the US is a safe haven for global investors confronted with a very stormy global investment climate. Consider the following: (1) On a 12-month basis through June, the US had private net capital inflows of $1.5 trillion (chart below). It'

Ed Yardeni

Market Call

Aug 14, 2022 2 min read

The stock market has been rallying since June 16 on mounting expectations that the most widely expected recession of all times might be a no-show and that inflation is peaking. July's strong payroll employment report and peakish CPI and PPI readings suggest that the cat is out of the bag. That's confirmed by several technical indicators: (1) Breadth. On Friday, over 90% of the S&

Ed Yardeni

Bear-Market Rally Or New Bull?

Aug 13, 2022 1 min read paid

We won't keep you in suspense: We think the bear market in the S&P 500 bottomed on June 16. If so, then we're in a new bull market. Consider the following based on our Blue Angels framework (chart below): (1) Corrections occur in bull markets when investors fear a recession that doesn't happen. The forward P/E drops, while forward earnings continues

Ed Yardeni

Stocks Rally As Earnings Estimates Get Cut

Aug 11, 2022 1 min read

Go figure: When industry analysts raised their earnings estimates during the first half of the year, investors thought they were delusional. Investors proceeded to trash stocks because they feared a recession. Now that analysts are finally cutting their estimates, investors have been snapping up stocks since June 16 because they were cheap, especially now that recession fears have abated. The charts below show that analysts collectively have been reducing their

Ed Yardeni

Analysts Cutting Earnings Estimates

Aug 9, 2022 1 min read paid

Industry analysts weren't bullish enough about the Q2 earnings of the S&P 500. So far, 87% of S&P 500 companies have reported revenues and earnings for Q2. The revenue and earnings surprises are historically strong but near their lowest readings since the pandemic recovery began. Revenues are beating the consensus forecast by 2.8% and earnings by 6.0%.

Ed Yardeni

Valuation-Led Rally Could Sputter This Week

Aug 7, 2022 1 min read paid

The bull runs in the bond market since June 14 and the stock market since June 16 could stall this week. Both markets have probably discounted that July's CPI report (on Wednesday) should be moderated by falling gasoline prices and durable goods prices, while rent inflation could be more troublesome. The markets may not have fully discounted the likelihood that July's strong employment report (reported this

Ed Yardeni

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