Deep Dive

DEEP DIVE: Switching Planets: Investors Now From Venus, Analysts From Mars

Aug 4, 2022 3 min read paid

Since our June 24 QuickTakes, we’ve been making the case that the bear market in the S&P 500 might have ended on June 16, when it was down 23.6% to 3666 from its record high of 4796 on January 3. We wrote: “[S]entiment indicators were so bearish that they were bullish. … On a fundamental basis, we’ve noted that commodity prices are showing signs of

Ed Yardeni

DEEP DIVE: How Much Rate Hiking Does QT2 Equal?

Jul 28, 2022 3 min read paid

Melissa and I have been wondering how much federal funds rate hiking does the current round of quantitative tightening (QT2) equal? Last week, in the July 20 Morning Briefing, we asked a similar question about the 10% increase in the US dollar index (DXY) since the start of this year.

Ed Yardeni

DEEP DIVE: The Dollar & TINAC (There Is No Alternative Country)

Jul 24, 2022 2 min read paid

As we observed yesterday, the geopolitical mess around the world continues to favor the US dollar, suggesting increasing net capital inflows from overseas into the US financial markets. That helps to explain the recent peaking of the bond yield, which should provide some support to the valuation multiples of stocks.

Ed Yardeni

DEEP DIVE: Braking China

Jul 17, 2022 2 min read paid

China continues to watch its real estate market deflate and its Covid cases inflate, while worries about its banking system grow. No wonder the recent rally in Chinese shares came to an abrupt halt (Fig. 4). Here’s some news that caught our eye:

Ed Yardeni

DEEP DIVE: US Economy & Financial Markets - From Wrong to Right Track?

Jul 1, 2022 11 min read paid

Strategy I: On the Right Track. What could go right or wrong over the rest of this year? The year is half over. It has been an annus horribilis so far. Will it continue to be so during the second half of the year? Or will we see a gradual improvement that might set the stage for an annus mirabilis in 2023? The only investment strategies that have worked out

Ed Yardeni

DEEP DIVE: How's Business?

Jun 26, 2022 3 min read paid

This is an excerpt from our Morning Briefing. Every month, the Census Bureau releases its “Advance Monthly Sales for Retail and Food Services.” The latest report was released on June 15 at 8:30 a.m. An hour and a half later every month, the Census Bureau releases its “Manufacturing and Trade Inventories and Sales” report—for the previous month. In other words, on June 15, Census reported retail sales

Ed Yardeni

DEEP DIVE: Revisiting Venus and Mars

Jun 21, 2022 3 min read paid

This is an excerpt from our June 21, 2022 Morning Briefing. Strategy I: Investors Are Still from Mars. Our May 18 Morning Briefing was titled “Analysts Are from Venus; Investors Are from Mars.” We wrote: “Stock market investors seem to believe that industry analysts are becoming increasingly delusional. The latter have been raising their revenues and earnings estimates since the start of the year, while the former have been cutting

Ed Yardeni

DEEP DIVE: Bear Spray

May 29, 2022 4 min read paid

This is an excerpt from our May 23, 2022 Morning Briefing. Next week, my wife and I will be on vacation visiting the bears (and bison) at Yellowstone National Park and Grand Teton National Park. We will be carrying some bear spray, just in case. The National Park Service offers the following advice: “Bear spray is a non-lethal deterrent designed to stop aggressive behavior in bears. Its use can reduce

Ed Yardeni

DEEP DIVE: The Fed's Quantitative Tightening: Run(off) for the Hills?

May 19, 2022 6 min read paid

In recent conversations with our accounts, we have been hearing more concern about the second round of quantitative tightening (QT2), which starts next month.

Ed Yardeni

DEEP DIVE: More on Inflation & Stocks

May 13, 2022 4 min read paid

Strategy I: 1987-Style Bear Market? I’ve recently been asked when was the last time we had a P/E-led bear market while earnings continued to increase. Note: The following is an excerpt from a recent YRI Morning Briefing. The obvious answer is 1987. Our monthly Blue Angels framework, which starts in late 1978, shows that the S&P 500 dropped 33.5% from August 25, 1987 through December

Ed Yardeni

DEEP DIVE: Inflation Boosts Earnings & Depresses Valuation

May 12, 2022 3 min read paid

Over the past year, inflation has been having a positive impact on analysts’ consensus forecasts for earnings in 2022 and 2023 but a negative impact on the valuation multiple that investors are willing to pay for those earnings estimates. Needless to say, the former positive effect has been trumped by the latter negative effect. The negative impact reflects the jump in bond yields so far, concerns that bond yields will

Ed Yardeni

DEEP DIVE: Inflation Tends To Be Spikey

May 7, 2022 3 min read paid

Why is the 10-year Treasury bond yield only around 3.00% when the latest headline CPI and PCED inflation rates were 8.5% y/y and 6.6% y/y? Why would bond investors willingly lock in such a painful negative real return?

Ed Yardeni

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