Yardeni QuickTakes (Page 65)

What's Driving Bond Yields?

May 22, 2023 2 min read paid

Two of our favorite technical indicators for the 10-year Treasury bond yield are currently bullish. The yield tends to be highly correlated with the ratio of the nearby futures prices of copper to gold (chart). The ratio suggests that the yield, which is currently 3.70%, should be much closer to 2.00%. We view the ratio as a risk-on versus a risk-off indicator. The Citigroup Economic Surprise Index (CESI)

Ed Yardeni

Market Call: Bad Breadth Still An Issue

May 21, 2023 2 min read paid

Will the stock market rally broaden? If it doesn't do so, will the rally fade? Below, Joe Feshbach offers his opinion from a trader's perspective. In our opinion, concerns about the market's bad breadth is just another brick in the wall of worry that the stock market has been climbing since the bear market bottomed on October 12, 2022. It has been widely noted

Ed Yardeni

The Economic Week Ahead: May 22-26

May 20, 2023 2 min read paid

On Friday, Fed Chair Jerome Powell said that monetary policy is "restrictive." So Fed policy will be data-dependent, particularly so on inflation indicators. For those of us in the "pause" camp, he seemed to suggest that's possible. He acknowledged that the banking crisis is bound to tighten credit conditions reducing the need for the Fed to get more restrictive. That's been our

Ed Yardeni

Bull Market or Rally in a Bear Market?

May 18, 2023 2 min read paid

Our short answer to the question posed in the title: "Bull market." The S&P 500 rose to a new high today of 4198.05 for 2023 taking out the February 2 closing high of 4179.76 (chart). The market has climbed a Wall of Worry thanks to Wall Street's Worriers, who've predicted that the banking and the debt ceiling crises could make

Ed Yardeni

Misleading Economic Indicator?

May 18, 2023 2 min read

Today's Composite Economic Indicators, compiled by the Conference Board, are pointing in different directions. The Index of Leading Economic Indicators (LEI) fell in April for the 13th straight month, sinking 0.6% m/m and 8.6% over the period to the lowest level since September 2020 (chart). The LEI, which peaked at a record high last February, has led recessions by 12 months on average. While the

Ed Yardeni

DEEP DIVE: Bad & Good Breadth

May 18, 2023 2 min read paid

Joe and I have recently observed that the S&P 500 has a breadth problem. This is a widely recognized problem by most technicians who track the stock market. The good news is that a more fundamental measure of earnings breadth is performing well. Consider the following: (1) If we are in a bull market that started on October 12, 2022 as we still believe, our thesis isn’t

Ed Yardeni

Dr Ed's Video Webcast 5/17/23

May 17, 2023 1 min read paid

The Fed sought to allay fears of bank runs when it provided backstop funds to banks. Consider the fears allayed—so far, at least. The disintermediation threat hasn’t descended; it hasn’t wrought a credit crunch, a recession, or widespread economic destruction. Now if fears aren’t stoked by further talk of bank runs, maybe, just maybe, the threat will go away. … Also: The high-inflation saga‘s loose ends

Ed Yardeni

Progress In Debt Ceiling Talks Lifts Stock Prices

May 17, 2023 2 min read paid

Stock prices are up this morning on news that both the Democrats and the Republicans want to get a deal done on the debt ceiling issue. “I think at the end of the day we do not have a debt default,” House Speaker Kevin McCarthy told CNBC in a “Squawk Box” interview this morning. President Joe Biden echoed that sentiment later in remarks from the White House: “We’re going

Ed Yardeni

No Hard Feelings

May 16, 2023 2 min read paid

The stock market fell today on Home Depot's disappointing guidance. Consumers fixed up their homes during the pandemic when social distancing restrictions kept many of them at home. By late last year and early this year, consumers pivoted from purchasing goods to spending on services. In other words, HD's y/y comps are challenging as housing-related retail sales have been weakening in recent months (chart). Today&

Ed Yardeni

New York's Regional Business Survey Shows Lots of Weakness

May 15, 2023 1 min read paid

Business activity fell sharply in New York State, according to firms responding to the May 2023 Empire State Manufacturing Survey conducted by the Federal Reserve Bank of New York. It was released this morning. The headline general business conditions index dropped 43.0 points to -31.8. New orders and shipments plunged after rising significantly last month. Delivery times shortened somewhat, and inventories contracted. Both employment and hours worked edged

Ed Yardeni

Market Call: The Breadth Question

May 14, 2023 2 min read paid

They are back in their saddles again. The Magnificent 8 (a.k.a., the MegaCap-8) have been leading the stock market higher again. They've regained much of the market cap share they lost during last year's bear market, especially in recent weeks. They currently account for 24.7% of the S&P 500 index and 46.5% of the S&P 500 Growth index

Ed Yardeni

The Economic Week Ahead: May 15-19

May 13, 2023 2 min read paid

The week ahead is jampacked with coincident and leading economic indicators. The most up-to-the-minute ones will be May 12 mortgage applications (Wed) and May 13 jobless claims (Thu). The former seems to be bottoming suggesting that April housing starts (Wed) and existing home sales (Thu) might surprise to the upside, or at least not on the downside (chart) On a four-week moving average basis, jobless claims have moved higher recently

Ed Yardeni

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