Technicals

Stock Prices Are Jumping Again

Nov 12, 2023 3 min read paid

After the stock market closed on Friday, Moody’s reduced the US government's credit rating from “stable” to “negative” citing large fiscal deficits. The ratings agency said in a statement that “continued political polarization” in Congress raises the risk that lawmakers will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability.” Will bond and stock prices tumble on Monday again

Ed Yardeni

Ackman's Big Short

Oct 23, 2023 2 min read paid

“There is too much risk in the world to remain short bonds at current long-term rates,” Bill Ackman said in a post on X, formerly known as Twitter, this morning. “We covered our bond short.” He first disclosed his Big Short on August 2 on X, one day after Fitch Ratings downgraded US Treasuries from AAA to AA+, and two days after the Treasury Department announced that the government would

Ed Yardeni

Market Call: "No, Mr. Bond, I Expect You To Die!"

Aug 20, 2023 3 min read paid

Does the Fed really want to see the yield curve "disinvert" with the 10-year Treasury bond yield (currently 4.26%) rising up to the 2-year Treasury note yield (currently 4.92%) (chart)? We will find out on Friday, when Fed Chair Jerome Powell speaks at the Fed's annual Jackson Hole conference. If Powell wants to calm the bond market down, he should acknowledge that inflation has

Ed Yardeni

Market Call: The Bond Vigilantes Are Saddling Up

Aug 13, 2023 3 min read paid

As we anticipated, the S&P 500 has dropped to its 50-day moving average (dma) on Friday (chart). It is down 2.7% from its bull market high of 4588.96 on July 31. Leading the way down has been the S&P 500 Information Technology sector (-7.0%). Weighing on this sector's valuation multiple has been the jump in the 10-year Treasury yield above 4.

Ed Yardeni

Market Call: September Is Coming!

Aug 6, 2023 2 min read paid

The S&P 500 is down 2.4% from its bull market high of 4588.96 on July 31 through Friday's close (chart). It ran into resistance at the top end of its bullish channel, which could take the index to 4400-5000 by the end of this year. We are sticking with 4600, suggesting that there isn't much upside for the rest of this year.

Ed Yardeni

Market Call: Running Into Resistance & Bond Vigilantes

Aug 2, 2023 2 min read paid

The good news is that almost everyone agrees that an imminent recession isn't very likely. That reduces the downside concerns about corporate earnings. But it increases the downside potential for the stock market's valuation multiple if the bond yield continues to rise. The Bond Vigilantes may be saddling up in response to the widening federal deficit. They don't seem to mind budget deficits when

Ed Yardeni

Dow Theory On Bullish Track

Jul 29, 2023 2 min read paid

The S&P 500 closed at the bull market's high of 4582.22 on Friday. Chart technicians continue to ring the alarm bells. The index is 11.9% above its 200-dma, which is 4094.1 (chart). Sentiment is too bullish. Breadth is too narrow. Valuations are stretched. The bears are capitulating. Run for the hills! Yet, last week, the Dow Theory flashed a bright green signal. That&

Ed Yardeni

Market Call: Hot But Sunny

Jul 23, 2023 2 min read paid

The stock market may be too hot, but the outlook for the economy remains sunny. There are signs that the hottest sectors of the market may be starting to cool off a bit, while the coolest sectors are warming up. It's time for the laggards to be leaders for a while. In other words, Information Technology and Communication Services stocks might chill, while Energy, Financials, Industrials, and Materials

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

Nothing To Fear But Fearless Investors

Jul 12, 2023 2 min read paid

The S&P 500 climbed to a new bull market high today of 4472 (chart). It is now 10.6% above its 200-day moving average. It is climbing along the upper end of its bull-market channel. Today's CPI news helped to alleviate fears that persistent inflation might force the Fed to persist with rate hiking resulting in a recession. Inflation seems to be more transitory than was

Ed Yardeni

Market Call: Bullish Channel

Jul 9, 2023 2 min read paid

The current bull market started on October 12 when the S&P 500 bottomed at 3577.03 (chart). It rose 24.6% reaching a high of 4455.59 on July 3. So far it is down only 1.3% through Friday's close. It seems to have found resistance at the upper end of the bull market's channel. If so, then it might fall back down

Jackie Doherty

Running of the Bulls

Jul 5, 2023 1 min read paid

Are there too many bulls? The Bull/Bear Ratio (BBR) compiled by Investors Intelligence jumped to 3.00 during the July 4 week, up from 2.69 the previous week (chart). It is the highest reading since the bull run from March 23, 2020 through January 3, 2022. The bull then got gored during the bear market through October 12, 2022. During the latest week, the bullish percentage rose to

Ed Yardeni

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