Ed Yardeni

The Economic Week Ahead: July 10-14

Jul 8, 2023 2 min read

This week is jampacked with June's inflation indicators. On balance, they should show that inflation continues to moderate. On Monday, the FRBNY survey of consumer inflationary expectations should decline from May's 4.1% for the one-year-ahead and 3.0% for the three-years-ahead readings. The price of gasoline has a big impact on these expectations, and it was down 26.5% y/y during the four weeks

Ed Yardeni

DEEP DIVE: The Worry List

Jul 8, 2023 4 min read paid

Economists who are still forecasting a recession typically offer four reasons. First is the inversion of the yield curve. Second is the drop in M2. Third is the significant tightening of monetary policy resulting from the increase in the federal funds rate combined with quantitative tightening (QT). Fourth is that consumers’ excess saving accumulated during the pandemic could run out as soon as September. A more immediate risk to the

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

Dr Ed's Video Webcast 7/6/23

Jul 6, 2023 1 min read paid

Instead of the economywide recession that was widely expected to result from the Fed’s monetary tightening, recessionary weakness rolled through different areas of the economy at different times. Now that rolling recession is turning into a rolling recovery. Accordingly, we’re raising our Q2 real GDP forecast from 1.0% to 2.0%, followed by 2.0% in Q3 and Q4. We now see a 75% chance of a

Ed Yardeni

Both Analysts & Investors Are Optimistic

Jul 5, 2023 2 min read paid

In the stock market equation P = P/E x E, the consensus expected forward earnings of industry analysts determines earnings (E), while investors determine the forward earnings multiple (P/E) that they are willing to pay for E. Industry analysts remain optimistic on S&P 500 forward revenues which rose to another record high during the June 29 week (chart). They've also stopped lowering their consensus expectations

Ed Yardeni

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

Construction Is Booming Despite Housing Recession

Jul 3, 2023 1 min read paid

The single-family housing market has been in a recession since early 2022. Housing is among the most interest-rate sensitive sectors of the economy. It tends to go down first when the Fed is raising interest rates, setting the stage for a broader economy-wide recession. So far, it's been different this time. Total construction--including residential, nonresidential, and public--rose to yet another record high in May (chart). That's

Ed Yardeni

Market Call: Melting Up?

Jul 2, 2023 2 min read paid

Growing confidence in the resilience of the economy has been one of the main reasons why the stock market has been so strong since October 12, with the S&P 500 up 24.4%, the Nasdaq up 32.4%, and the S&P 500 Transportation index up 21.0% since that date. On Friday, the S&P 500 closed up 1.22% at 4450.38 (chart). That&

Ed Yardeni

The Economic Week Ahead: July 3-7

Jul 2, 2023 2 min read paid

The first week of every month tends to be jampacked with employment and PMI releases. All eyes will be on June's employment report at the end of the week. The recent upturn in initial unemployment claims suggests that the labor market may be cooling off a bit. Thursday's jobless claims should confirm that. However, that same day, May's JOLTS report should show that job

Ed Yardeni

Market Not Fazed By Bearish Fed and Nvidia Talk

Jun 29, 2023 2 min read paid

The stock market held up remarkably well yesterday despite Fed Chair Jerome Powell's warning that "there's more restriction coming" because the labor market remains too strong. He suggested that 25-bps rate hikes are still on the table for the next two meetings of the FOMC. Powell spoke during a monetary policy session in Sintra, Portugal, which is famous for its huge crashing ocean waves

Ed Yardeni

DEEP DIVE: Baby Boomers Retiring With $75 Trillion In Net Worth

Jun 28, 2023 4 min read paid

When the Fed started to raise interest rates aggressively last year, there was lots of speculation that it would cause a recession. Housing certainly fell into a recession as housing starts plunged 25.7% from a peak of 1.80 million units (saar) during April 2022 to a trough of 1.34 million units during January and April 2023 (Fig. 1). Consumer spending adjusted for inflation has been on a

Ed Yardeni

The Promised Land

Jun 27, 2023 2 min read paid

The permabears will have to postpone their imminent recession yet again based on today's batch of US economic indicators, which suggests that our "rolling recession" is turning into a "rolling expansion." The housing market seems to be recovering nicely from its recession, which started early last year. The manufacturing sector is showing signs of bottoming, while nondefense capital goods orders excluding aircraft rose to

Ed Yardeni

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