Bonds

Bessent Follows Yellen’s Lead & Gold Price Rises To New High

Feb 5, 2025 3 min read paid

The bond market relaxed today after Treasury Secretary Scott Bessent's debut Quarterly Refunding Announcement (QRA) proved to be a non-event. The 10-year Treasury yield fell 9bps to 4.43%, its lowest level since the Federal Reserve's last rate cut, in mid-December (chart). Bessent had been critical of Janet Yellen's usage of short-term Treasury bills to finance the federal budget deficit. Many investors, therefore, were

Ed Yardeni
Eric Wallerstein

Stocks Stay Afloat in Deep Waters

Jan 27, 2025 3 min read paid

DeepSeek took a bite out of semiconductor, other tech, as well as nuclear power stocks today. Many of these AI plays dropped by double-digit percentage points, and Nvidia fell 17%. Other than the impact of the largest US stock nearly entering a bear market in one day, plus some collateral damage in other large stocks, the broader market held up just fine. The S&P 500 fell less than

Ed Yardeni

Valuation & Beauty

Jan 13, 2025 3 min read paid

Stock market valuation and beauty have a lot in common: They are both in the eyes of the beholder. At the end of the original version of the movie King Kong (1933), the big ape’s death is blamed by his handler on Ann Darrow, Kong’s blonde love interest, played by Fay Wray: "It was beauty that killed the beast." Lots of investors are worrying that valuation

Ed Yardeni
Eric Wallerstein

Bond Yields Have Normalized

Jan 8, 2025 3 min read

The backup in bond yields since mid-September did not surprise us. But it has surprised lots of other financial pundits, who are warning that this could be bad news for stocks. It could be, especially if the 10-year US Treasury bond yield revisits last year's high of 5.00%. That would probably bring a buying opportunity in the bond and stock markets. We think that bond yields have

Ed Yardeni
Eric Wallerstein

Is It Too Late To Panic?

Dec 19, 2024 3 min read paid

Since the December 5 QuickTakes titled "Contrarian Indicators Showing Too Many Bulls," we've been warning that bullish sentiment is too high and setting the stage for a pullback. In Sunday's QT titled "Game of Drones," we reiterated: "Is it time to panic in the stock market? It's always best to panic before the crowd does. The issue isn'

Ed Yardeni
Eric Wallerstein

Market Call: Trend Spotting

Nov 3, 2024 3 min read

Some of our best friends are technicians. Ed was at Prudential Equity Group at the same time as Ralph Acampora, the renowned market historian and technical analyst. Ralph's analysis often confirmed Ed's fundamental analysis. So in our spare time we like to follow the charts for clues about the future, and we occasionally spot trends that seem to support our forecasts. Currently, we are focusing on

Ed Yardeni

Sell Bonds, Buy Gold?

Oct 21, 2024 3 min read

Yes, that has been our advice since mid-August. Our August 19, 2024 Morning Briefing was titled, "Get Ready To Short Bonds?" We wrote: "Bond investors may be expecting too many interest-rate cuts too soon if in fact August’s economic indicators rebound from July levels and the Fed pushes back against the markets’ current expectations for monetary policy. So we are expecting to see the 10-year Treasury

Ed Yardeni
Eric Wallerstein

Market Call: The Next Surprise

Sep 22, 2024 3 min read

So far, September isn't living up to its bad reputation for the stock market now that the S&P 500 and the DJIA are at record highs. At the start of the month, on September 2, we asked, "What Could Possibly Go Wrong?" We wrote: "We are hard pressed to find what could possibly go wrong in September. So perhaps, the path of least

Ed Yardeni
Eric Wallerstein

Powell Declares Mission Accomplished

Sep 18, 2024 3 min read

The Fed cut the federal funds rate (FFR) by 50bps today. This marks the end of the Fed’s monetary policy tightening cycle that started during March 2022, which was aimed at bringing inflation back down to 2.0% even if that caused a recession. Inflation isn't quite there yet, but it is close enough. So today, in his presser, Fed Chair Jerome Powell reiterated that the Fed&

Ed Yardeni
Eric Wallerstein

Tough Treasury Auctions Belie Renewed Recession Chatter

Aug 8, 2024 3 min read paid

US stock prices and bond yields rose today following the release of the latest weekly jobless claims report confirming our view that the labor market is still doing well. The S&P 500 jumped 2.3% to 5,319.31 and the 10-year Treasury yield briefly rose above 4.00%. The recent lift in the bond yield was exacerbated by the second straight day of weak Treasury auctions. Let&

Ed Yardeni
Eric Wallerstein

Bond & Stock Prices In Mini Meltup Over Soft Landing

Dec 14, 2023 2 min read

Investors are obviously relieved that the economy may be on a sustainable soft-landing path and might avoid a recession (again) in 2024. They are especially relieved that Fed Chair Jerome Powell recently implied that he and his colleagues are relieved about this too and are talking more dovish now: (1) Waller. For example, two weeks ago, Fed Governor Christopher Waller, in a November 28 speech titled, "Something Appears to

Ed Yardeni

Market Call: Spotting Reindeers

Nov 5, 2023 2 min read paid

Last week was a wild one for sure in the bond and stock markets. The bond yield plunged and stock prices soared led by SMidCaps and interest-rate sensitive sectors and industries. Fears that the bond yield might continue to surge above 5.00% evaporated in response to weaker-than-expected employment indicators and a broadening consensus that the Fed is done raising the federal funds rate. The bond yield plunged 41bps from

Ed Yardeni

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