LargeCaps & SMidCaps

Is The Bull Market Broadening Or Rotating?

Jul 17, 2024 2 min read paid

Many investors are wondering if the recent outperformance of the S&P 400 and the S&P 600 (i.e., the "SMidCaps") and the equal-weighted S&P 500 reflect a sustainable broadening of the bull market. Or is it a temporary rotation out of the Magnificent-7 into the S&P 493 and the SMidCaps? For now, we're in the camp that breadth

Ed Yardeni
Eric Wallerstein

Fed Pivot, Trump 2.0, SCOTUS Chevron Ruling & Earnings Broaden Stock Market Meltup

Jul 16, 2024 3 min read

We've been predicting a broadening stock market meltup in the event that the Fed starts cutting the federal funds rate (FFR) as inflation moderates while economic growth remains solid. Last week's CPI and today's retail sales report confirm that's what's happening in the economy. Fed Chair Jerome Powell's dovish comments yesterday sealed the deal: As of this morning,

Ed Yardeni
Eric Wallerstein

Market Call: Blue Angels Flying High

Jun 9, 2024 2 min read paid

Our Blue Angels framework shows that the S&P 500 was back in record high territory last week as S&P 500 forward earnings rose to yet another record high (chart). Meanwhile, the S&P 500's forward P/E has been relatively steady just above 20.0 in recent weeks. The S&P 500's forward P/E with and without the MegaCap-8

Ed Yardeni

Why Are LargeCaps Doing Better Than SMidCaps?

May 21, 2024 2 min read paid

Why has the S&P 500 LargeCaps stock price index been more expensive than the indexes for the S&P 400 MidCaps and S&P 600 SmallCaps since the pandemic (chart)? From around 2005 until about 2019, the forward P/E of the S&P 500 had mostly been below the forward P/Es of the SMidCaps (chart). The last time that LargeCaps sported higher P/

Ed Yardeni
Eric Wallerstein

Market Call: S&P 500/400/600 Are Flying With The Blue Angels

Jan 15, 2024 2 min read paid

Our Blue Angels framework allows us to visualize the stock market equation P = P/E * E in one chart, where P is the stock price index, E is the forward earnings of the index, and P/E is the forward valuation multiple. Forward earnings is the time-weighted average of analysts' consensus earnings expectations for the current year and the coming year. Our analysis of the Blue Angels is that

Ed Yardeni

Happy Old & New Years!

Dec 31, 2023 2 min read paid

The S&P 500 rose 24.2% last year after falling 19.4% during 2022 (chart). Since the start of the data in 1928, years with gains of over 20% were followed by years of 5.9% gains on average. Excluding recession years, the second-year gains averaged 9.7%. Losses during recession years averaged 10.1%. Down years for the market are more likely than not to be associated

Ed Yardeni

Valuation-Led Meltup

Dec 28, 2023 2 min read paid

Meltups and meltdowns in the stock market are mostly attributable to rapid increases or decreases in earnings valuation multiples. The current meltup is no different. The S&P 500 is up 16.2% with its forward P/E up 14.5% since the October 27 correction low. That's mostly because investors have become more confident that inflation will continue to slow while the economy continues to grow.

Ed Yardeni

What's In Style? Value, SMidCaps & Global

Jan 12, 2023 2 min read paid

The S&P 500 is back testing its 200-day moving average (chart). It previously did so on November 30, but failed to move higher. It might succeed this time if the current Q4-2022 earnings reporting season isn't disappointing relative to expectations. The S&P 500 equal-weighted index continues to outperform the S&P 500 market-cap weighted index (chart). More stocks are participating in the recent

Ed Yardeni

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