Stock Market

Bull/Bear Ratio Remains Under 1.0

Jun 15, 2022 2 min read paid

The Bull/Bear Ratio (BBR) remains bearish. It has been bouncing around 1.00 since late February. During the bull market from March 9, 2009 through January 3, 2022, a reading of 1.00 or less turned out to be a very good short-term and long-term buy signal from a contrarian perspective. That’s when investors could count on the Fed Put to save the day. That’s no longer

Ed Yardeni

It’s Officially a Bear Market

Jun 14, 2022 2 min read

On Monday, the latest S&P 500 correction morphed into a bear market when the index closed down more than 20.0%—specifically 21.8%—below its record-high close on January 3, 2022. Over this period, the S&P 500 forward P/E plunged 26.6% from 21.4 to 15.7 even as forward earnings (i.e., the time-weighted average of analysts’ earnings estimates for 2022 and

Ed Yardeni

CPI Unnerves Investors

Jun 10, 2022 1 min read

This past week was an ugly one for the S&P 500 adding significantly (5.1ppts) to the 18.2% ytd loss in the index. The MegaCap-8 stocks continued to weigh most heavily on the S&P 500 Information Technology, Communication Services, and Consumer Discretionary sectors. Here is the ytd and past week's performance derby for the index and its 11 sectors: Energy (58.7%, -0.

Ed Yardeni

More Central Bank Tightening

Jun 9, 2022 1 min read paid

Don't fight the central banks when they are fighting inflation. Stock prices dropped today on news that the European Central Bank will end quantitative easing on July 1, then raise interest rates by 25bps on July 21. It will then hike again on September 8. At -0.5%, the ECB's deposit rate has been in negative territory since 2014. Unlike the Fed, the ECB remains committed

Ed Yardeni

S&P 500 Industry Analysts Giving Earnings Mixed Reviews

Jun 9, 2022 1 min read paid

While many industry analysts remain optimistic about the earnings outlook for the S&P 500 industries they cover, some of them are turning more cautious. We can see this in the following table which shows the ytd performance of forward earnings through the June 2 week. The following are our main quick takes: (1) Here is the ytd performance derby of the forward earnings for the S&P

Ed Yardeni

Bull/Bear Ratio Remains Low

Jun 8, 2022 1 min read

Stock market sentiment remains bearish, which is bullish for longer-term investors with a contrarian streak. Consider the following: (1) Investors Intelligence Bull/Bear Ratio (BBR) was below 1.00 for the sixth successive week this week—slipping to 0.89 this week, after climbing the prior two weeks from 0.65 (the lowest since mid-February 2016) to 0.93 over the period. The BBR has been bouncing around 1.00

Ed Yardeni

Tracking Equity Flows

Jun 6, 2022 1 min read

The stock market’s been dropping, but who is selling stocks? Is the stock market so illiquid that just $48.4 billion in net outflows from equity mutual funds and exchange-traded funds (ETFs) during April caused April’s steep 8.8% drop in the S&P 500? The S&P 500 also fell sharply during the first three months of this year, by 4.9%, but there were

Ed Yardeni

Beware of Wildlife

Jun 1, 2022 1 min read

On our first day at Yellowstone National Park yesterday, my wife Valerie and I spotted lots of bison, but no bears. I believe this is a bullish omen for the stock market. They were all grazing quietly. We hope to see some bears today. Hopefully, they won't pose a menacing threat to us. Of course, at Yardeni Research, our outlook for the economy and financial markets isn'

Ed Yardeni

A Good Week For a Change

May 29, 2022 2 min read paid

Last week was the first good one for the stock market in quite a while. The S&P 500 rose 6.6%, with two of the index’s most depressed sectors this year outperforming for a change: Consumer Discretionary (9.2%) and Information Technology (8.1%). Nevertheless, the best-performing sector this year so far has been Energy, and it was up 8.1% last week too. Financials (8.0%

Ed Yardeni

Tech Has Had a Rough Year, but What Comes Next?

May 28, 2022 3 min read

The front cover story of the May 30 BusinessWeek is titled THE GREAT TECH ROUT (linked below). Might this be the latest contrary indicator for bullishly-inclined investors? The story was actually posted on Bloomberg on Thursday, May 26 at 12:01 AM EDT. The Nasdaq fell to the year's low of 11,264.45 on Tuesday, May 24. It was up 7.7% by Friday's close.

Ed Yardeni

Are the Economic Fundamentals Bullish or Bearish for the S&P 500?

May 28, 2022 2 min read

There is a remarkably close fit between the yearly percent change in the S&P 500 stock price index and the national manufacturing purchasing managers index (M-PMI). The latter is available only through April; the reading for May will be released next week, on Wednesday, June 1. However, the M-PMI is highly correlated with the general business indexes of the regional business surveys compiled by the Federal Reserve Banks

Ed Yardeni

A Short History Of Falling P/Es

May 23, 2022 1 min read paid

In the past, there have been dives in the S&P 500’s valuation multiple similar to the one so far this year: (1) The valuation deterioration in the early 1970s was associated with the devaluation of the dollar by President Nixon and the first of the decade’s two energy price shocks. Along the way, Franklin National blew up. Inflation was a protracted problem throughout the 1970s. (2)

Ed Yardeni

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