Yardeni QuickTakes (Page 53)

Market Call: The Wild Bunch

Oct 1, 2023 3 min read

Just after the S&P 500 nearly hit our year-end target of 4600 ahead of schedule on July 31, we concluded that the index might fall to its 200-day moving average, which is currently around 4200. It could easily do so during October since it closed at 4288 on Friday. Then we see a yearend Santa Claus rally back to 4600, or close to that level. That's

Ed Yardeni

The Economic Week Ahead: October 2 - 6

Sep 30, 2023 2 min read paid

The first week of the month is usually jampacked with employment indicator releases. On balance, we expect they will show that the labor market remains relatively strong. August's JOLTS report (Tue) could show that job openings fell but remained high as evidenced by the "jobs plentiful" series in the consumer confidence survey (chart). The jobs plentiful series also suggests less upward pressure on wages, as measured

Ed Yardeni

DEEP DIVE: Everyone's Making Semiconductors

Sep 28, 2023 4 min read paid

Large tech companies have been jumping into the semiconductor industry. Amazon, Google, Tesla, and others have developed semiconductors for use in their own operations instead of buying all of their semiconductors from Nvidia, Intel and the like. Custom-made chips tailored to their company’s specific requirements can perform better and are cheaper to make than buying other companies’ chips in the market. In the case of AI server chips, companies

Ed Yardeni

Saudis Have A Vision

Sep 27, 2023 3 min read paid

Saudi Vision 2030 is the vision of Saudi Crown Prince and Prime Minister Mohammed bin Salman (MBS). He wants to diversify the economy of his country. Saudi Arabia’s sovereign wealth fund aims to spend $40 billion a year on the domestic economy—including the construction of Neom, a futuristic city in the desert with an estimated price tag of $500 billion. By some estimates that requires that the price

Ed Yardeni

Dr Ed's Video Webcast 9/27/23

Sep 27, 2023 1 min read

The Fed has paused its rate hiking for now but not without warning that resumed tightening is possible. Either way, monetary policy will be kept restrictive for longer than investors previously expected, Fed Chair Powell has said. What does that scenario imply for the economic outlook? Peaks in the federal funds rate are coincident indicators of financial crises caused by restrictive policy, which often trigger credit crunches and recessions. That’

Ed Yardeni

Talking Heads Talk Stocks Down

Sep 26, 2023 2 min read paid

We were surprised that stock prices didn't drop yesterday along with bond prices. So we aren't surprised to see stock prices down today. Contributing to the selloff was JPMorgan Chase CEO Jamie Dimon, who warned interest rates may need to rise further to subdue inflation. In an interview with The Times of India, he said that the Fed might have to raise the federal funds rate

Ed Yardeni

Strikes and Shutdowns and Bond Yields, Oh My!

Sep 25, 2023 2 min read paid

The stock market held up surprisingly well today under the circumstances: The UAW strike is shutting down more auto production. The federal government is heading toward a shutdown on October 1. Moody’s Investors Service warned in a note today that a US government shutdown would be a “credit negative” event for the country. The 10-year Treasury yield surged by more than 10bps to 4.55%, the highest since 2007

Ed Yardeni

Market Call: Powell Says Be Careful

Sep 24, 2023 2 min read paid

In his presser last Wednesday, Fed Chair Jerome Powell mentioned "careful" and "carefully" 16 times mostly to describe how the Fed will proceed from here. That sounds like good advice for investors right now. When he was asked about the impact of "external factors" on Fed policy and the economy, he provided a list of five troublesome developments: the UAW strike, a possible government

Ed Yardeni

The Economic Week Ahead: September 25-29

Sep 23, 2023 2 min read paid

This is a relatively slow week for economic data. That means that the markets will be mostly entertained by the talking heads of the Federal Open Mouth Committee. The chattering started on Friday, when two Fed officials (Governor Michelle Bowman and Boston Fed President Susan Collins) endorsed Fed Chair Jerome Powell's remark during his presser on Wednesday: "[W]e're committed to achieving and sustaining a

Ed Yardeni

Bond Yield Climbs to 4.50% As Yield Curve Is Disinverting.

Sep 21, 2023 2 min read paid

The Fed's hawkish pause, announced on Wednesday afternoon, has lifted the 10-year US Treasury yield to 4.50% this evening. We think it might consolidate here for a while consistent with our view that the yield has normalized back to where it was from 2003-2007, i.e., before the Great Financial Crisis (GFC). Back then, the 10-year TIPS yield and the expected inflation spread hovered around 2.00%

Ed Yardeni

Good News Is Bad News, For Now

Sep 21, 2023 2 min read paid

The Fed's hawkish pause has unsettled the bond and stock markets. During 2022 and early 2023, the widespread fear was that the Fed's tightening of monetary policy would send the economy into a recession, depressing corporate earnings and the stock market. Now the fear is that stronger-than-expected economic growth will force the Fed to maintain its restrictive stance for some time. So good news is bad

Ed Yardeni

FOMC's Message: High For Longer

Sep 20, 2023 2 min read paid

The FOMC’s latest Summary of Economic Projections (SEP) released today shows that the median forecast of the federal funds rate (FFR) for 2023 is 5.6%, unchanged from June’s SEP (table). The 2024 forecast was raised to 5.1% from 4.6%. As we expected, the FOMC’s message is that the FFR might be lowered next year by 50bps rather than 100bps. The latest SEP shows headline

Ed Yardeni

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