Yardeni QuickTakes (Page 102)

The Best Cure for High Commodity Prices

Jun 20, 2022 1 min read paid

In the commodity pits, traders often say: "The best cure for high commodity prices is high commodity prices." That's because when a commodity price soars, it depresses demand for the commodity and stimulates the supply of it. History shows that an even better cure for high commodity prices is a recession. During the late phase of economic expansions, the economy tends to boom. That drives up

Ed Yardeni

Well Below the 200-Day Moving Average

Jun 19, 2022 1 min read

Some widely followed technical and sentiment indicators suggest that the stock market is oversold and due for a rally. Consider the following: (1) The S&P 500 was extremely overbought last year. Around mid-year 2021, more than 90% of the stocks in the index were trading above their 200-day moving averages (dma). There has been a significant reversal of fortune since then with only 11.3% of the S&

Ed Yardeni

In the Event of Motion Sickness

Jun 19, 2022 1 min read paid

Below is the front cover of the latest Bloomberg Businessweek. It should be a very bullish contrary indicator for the stock market. In recent months, there have been plenty of signs of mounting bearish sentiment, which should be bullish from a contrarian perspective. However, fighting the Fed when the Fed is fighting inflation is not a good idea whether one is a contrarian or not. We still expect to see

Ed Yardeni

No Letup in the Valuation Meltdown

Jun 18, 2022 1 min read paid

The S&P 500’s forward P/E fell to 15.4 on Friday from just over 20.0 at the start of this year. That’s around the historical average for this valuation multiple. Lower readings typically have been associated with bear markets and recessions. The index fell into a bear market on Monday, but the jury is out on the recession call.

Ed Yardeni

A Horrible Week Even for Energy

Jun 18, 2022 1 min read

This was one of the worst weeks in one of the worst years, so far, for the stock market. Of the 100+ industries that we track in the S&P 500, only one was up, namely, Air Freight & Logistics. All the rest were down with more than half exceeding the 5.8% decline of the S&P 500. Keep in mind that the S&P 500

Ed Yardeni

US Production and LEI Signaling Softish Landing

Jun 17, 2022 2 min read paid

There was a tiny hint of a manufacturing recession in May's industrial production index, which was reported today. It is one of the four components of the Index of Coincident Economic indicators (CEI). May's Index of Leading Economic Indicators (LEI), also reported today, is signaling slower economic growth ahead as well: (1) The LEI, which remains near its recent record high, fell in May by 0.

Ed Yardeni

David Bowie and S&P 500 Earnings

Jun 16, 2022 2 min read

Ground control to Major Tom: "Have you heard that the US economy is falling into a recession?" Like David Bowie's astronaut, S&P 500 industry analysts seem to be in outer space. Their earnings estimates are certainly out there still: (1) Our Squiggles analysis (below) shows that through the week of June 9, the S&P 500 consensus revenues estimates for 2022 and 2023

Ed Yardeni

Two Regional Business Surveys Showing More Stagflation In June

Jun 16, 2022 2 min read paid

Two regional business surveys, conducted by five of the 12 Federal Reserve Banks, are now available for the New York and Philadelphia districts through June. These two always come out before the other three for Kansas City, Richmond, and Dallas. They also tend to reflect the average final results of all five surveys. The averages of both the two surveys and all five of them closely track the national manufacturing

Ed Yardeni

May's Retail Sales Depressed Q2's Real GDP

Jun 16, 2022 2 min read

May's retail sales was weak in current dollars (-0.3% m/m) and even weaker in real dollars (-1.6%). The question is whether consumers have more than satisfied their post-lockdown, pent-up demand for goods, and are now spending more on services? Consider the following: (1) The three rounds of stimulus checks provided by Uncle Sam (actually Uncles Don and Joe) during the pandemic certainly stimulated retail sales.

Ed Yardeni

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

Small Business Owners Depressed But Still Hiring

Jun 14, 2022 1 min read

Inflation is depressing, and it is depressing everyone—including consumers, business people, and investors in stocks and bonds. For example, consider May’s survey of small business owners conducted by the National Federation of Independent Business (NFIB): (1) Owners expecting better business conditions over the next six months decreased four points to a net negative 54%, the lowest level recorded in the history of the 48-year-old survey! (2) Inflation was

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

Browse All QuickTakes

Page 102 of 109