Stock Market

The stock market is driven by two key variables: the earnings estimates of industry analysts and the valuation multiple that investors are will to pay for those expectations. These QuickTakes monitor the latest developments relevant to stock investors.

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Margin Calls Not Main Source of Selling Pressure

May 13, 2022 1 min read

Are margin calls exacerbating the stock market selloff? Probably, but margin debt is relatively small compared to the market capitalization of the Wilshire 5000.

Ed Yardeni

Market Is Up Despite Hawkish Powell Interview

May 13, 2022 2 min read paid

Can the stock market finally overcome bad news? Imagine if Fed Chair Jerome Powell pivots further to the hawkish, dark side and says that he cannot guarantee that the Fed’s monetary tightening won’t cause a recession.

Ed Yardeni

DEEP DIVE: Inflation Boosts Earnings & Depresses Valuation

May 12, 2022 3 min read paid

Over the past year, inflation has been having a positive impact on analysts’ consensus forecasts for earnings in 2022 and 2023 but a negative impact on the valuation multiple that investors are willing to pay for those earnings estimates. Needless to say, the former positive effect has been trumped by the latter negative effect. The negative impact reflects the jump in bond yields so far, concerns that bond yields will

Ed Yardeni

The Buffett Ratio Remains High

May 12, 2022 2 min read

The Buffett Ratio rose to new record highs at the end of last year. In the past, Warren Buffett has opined that the stock market was overvalued when the ratio of the market capitalization of US equites to nominal GDP rose to around 2.0 or higher.

Ed Yardeni

Corrections Now & Then

May 11, 2022 2 min read

The S&P 500 is down 18.0% since it peaked at a record high on January 3. The current selloff is reminiscent of the 19.8% correction during the last three months of 2018 through Christmas Eve.

Ed Yardeni

Bull-Bear Ratio Remains Below 1.00

May 11, 2022 1 min read

The Investors Intelligence Bull/Bear Ratio (BBR) fell further below 1.00, to 0.68, during the May 10 week.

Ed Yardeni

S&P 500’s Tug-of-War Between Investors & Industry Analysts

May 10, 2022 1 min read

The meltdown in forward P/Es continued yesterday, while forward earnings continued to scale new heights.

Ed Yardeni

A Short-Lived P/E-Led Bear Market?

May 8, 2022 2 min read

Are we heading toward a P/E-led bear market even though earnings continue to grow?

Ed Yardeni

More Air Coming Out Of Valuation Multiples

May 7, 2022 2 min read

The air continued to come out of stock valuation multiples this past week. It has mostly been coming out of the S&P 500 Growth index’s MegaCap-8—i.e., Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, Nvidia, and Tesla. Consider the following:

Ed Yardeni

The S&P 500 Remains In a Correction

May 5, 2022 1 min read

“Ugly” is the only way to describe today’s stock market selloff. The S&P 500 is down 13.5% ytd since it set a record high on January 3. So it’s still in correction territory. It dropped 3.6% today, but that was after a 3.0% jump the day before.

Ed Yardeni

Bull/Bear Ratio Remains Depressed

May 4, 2022 1 min read paid

Ed Yardeni

Industry Analysts Bullish on S&P 500 Revenues

May 2, 2022 1 min read paid

Ed Yardeni