Stock Market

Market Dives As Powell Pushes Back

Feb 1, 2024 2 min read paid

As we expected, Fed Chair Jerome Powell pushed back on market expectations of a federal funds rate cut in March and more to come over the rest of the year. He was less dovish than the market expected. If he had been more dovish, he would have risked inflating a speculative asset bubble. Instead, stocks took a dive today in response to his press conference (chart). Stock prices were already

Ed Yardeni

Market Call: Three Scenarios

Jan 21, 2024 2 min read

We now see three possible historical precedents for the economy, the Fed, and the stock market's performance ahead: (1) The 1920s (with a subjective probability of 60%). This is our base case "Roaring 2020s" scenario. We've been discussing it since the start of the current decade. Our basic premise is that a chronic shortage of labor is forcing companies to use technological innovations to

Ed Yardeni

Market Call: What Should We Root For?

Jan 7, 2024 2 min read

Both the bond and stock markets didn't do much on Friday following the release of December's employment report and NM-PMI. The former looked better-than-expected at first, but not as strong in the details (and downward revisions of the previous two months), and wage inflation was higher than expected. The NM-PMI was weaker than expected led by an unbelievable (literally) drop in its employment sub-index down to

Ed Yardeni

Is Everybody (Too) Happy?

Dec 20, 2023 3 min read

Everybody in the stock market (at least everybody with long positions, which includes most investors) has been happy since the S&P 500 bottomed on October 27—until it stumbled a bit today. The market was up in the morning despite a dive by FedEx shares. But stock prices tumbled during a late afternoon selloff. Most pundits concluded that the market was overbought and due for a correction. We

Ed Yardeni

Stock & Bond Prices Flying With The Fed's Doves

Dec 13, 2023 3 min read paid

Today's Summary of Economic Projections (SEP) released by the FOMC after the committee's meeting was dovish. As a result, bond and stock prices continued their Santa Claus rallies that started at the beginning of November. The most important change in the latest SEP from the previous one during September is that the federal funds rate is projected to fall in 2024 to 4.6% rather than

Ed Yardeni

S&P 500 Earnings Climbing Higher

Dec 1, 2023 2 min read

S&P 500 earnings per share are heading up according to industry analysts. We agree. There was lots of pessimism over the past year, with a few influential Wall Street strategists predicting that this year’s result could break bad, i.e., below $200. We stuck with our projections of $225 for this year and $250 for 2024, which seemed farfetched (if not delusional) late last year. But then

Ed Yardeni

Halloween Is Over. Is Santa Here Already?

Nov 1, 2023 2 min read paid

It's possible that the S&P 500 bottomed today. Bond King Jeffrey Gundlach appeared on CNBC following Fed Chair Jerome Powell's presser and opined that the entire yield curve looked attractive, at least for a trade. We agree. He also observed that the S&P 500 might have found support at its uptrend line connecting the lows of March 23, 2020 and October 12,

Ed Yardeni

Uncle Sam Downgrade Raises Caution Flag

Aug 2, 2023 2 min read paid

In yesterday's QT, we noted that the 10-year Treasury bond yield was back just over 4.00% and that this might "weigh on stock valuations, especially of the MegaCap-8." That's what happened today. Yesterday, after the close, Fitch Ratings downgraded US government debt from AAA to AA+ for all the reasons that have been concerning in the bond market for years. The US federal

Ed Yardeni

The Bull Deserves A Rest

Jul 27, 2023 2 min read

The bull market's winning streak ended today. The Dow closed higher for 13 straight sessions through Wednesday, its longest series of positive closes since 1987. It was down 0.67% today. The Dow's longest-ever winning streak was 14 sessions, set in 1897, according to S&P Dow Jones Indices. The S&P 500 closed at 4537.41 today after hitting a bull market intraday

Ed Yardeni

Market Call: Getting Too Hot? Also: Our New S&P 500 Target.

Jul 16, 2023 2 min read paid

The S&P 500 is hot. The Nasdaq is even hotter. The mounting concern is that both might be getting too hot resulting in a stock market meltup that could set the stage for a meltdown. If so, we expect that the downdraft would be a correction rather than a new bear market since we give 25% odds to a recession scenario over the next two and a half

Ed Yardeni

June's CPI Was Cool

Jul 12, 2023 2 min read paid

Ed Yardeni

Hot Job Reports Hit Stocks & Bonds Like A Bucket Of Cold Water

Jul 6, 2023 2 min read paid

The job market is still hot despite the 500bps increase in the federal funds rate since March of last year. Today's batch of strong labor market reports turned investors cold on stocks and bonds. Good news for workers is bad news for financial markets if it means that the Fed will continue to raise interest rates. In addition, it gives hard-landers another spin: The economy may be strong

Ed Yardeni

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