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Dr. Ed Yardeni
Dr. Ed Yardeni is the President and Chief Investment Strategist of Yardeni Research, Inc., a provider of independent investment strategy and economics research for institutional investors. In this blog, we highlight some of the more interesting relationships and developments that should be of interest to investors. Our premium research service is designed for institutional investors.

Dr. Ed Yardeni

Powell’s Potent Put Powering Stock Market Meltup

From meltdown to meltup. The Greenspan Put, the Bernanke Put, and the Yellen Put all resulted from actions taken by the Fed under those three Fed chairs to give stock prices a boost when they seemed to need it to avert a meltdown. The Powell Put saved the day in late 2018 when the Fed chair started to pivot away from raising the federal funds rate in 2019 to actually lowering it three times instead. The S&P 500 soared 44.0% from December 24, 2018 to a record high on February 19, 2020....

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MAMU: The Mother of All Meltups

As of Friday June 5, the S&P 500 was up 42.8% since March 23. This 52-day meltup is historic. It is the best since bigger gains were recorded during August-September 1932 (up as much as 109.2%) and May-June 1933 (up as much as 73.2%). The meltup started the day after March 23, when the Federal Reserve announced QE4Ever and started carpet-bombing the financial markets and the economy with B-52s full of cash (Fig. 1). Since then, the Fed’s balance sheet rose by $2.5 trillion to a record...

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Economic Alphabet Soup: V, U, Z, W, L or Swoosh?

Will the economic recovery be shaped like a V, U, W, L, or Z? Cases can be made for all of these possibilities. There are other possible shapes to the recovery such as a square root sign, and even a “swoosh,” like Nike’s logo. Schematic diagrams of these alternatives can be seen in a May 11 WSJ article titled “Why the Economic Recovery Will Be More of a ‘Swoosh’ Than V-Shaped.” In the past, economic recoveries from most recessions tended to be V-shaped. The experience of the Great...

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US Declaration of (Cold) War

Coauthored with Jackie Doherty, the senior contributing editor at Yardeni Research, Inc. The major US equity market indexes continued to rebound, with the Dow Jones Industrial Average crossing back above the 25,000 marker on Wednesday, fueled by the slow reopening of the US economy in the wake of the COVID-19 shutdown. The S&P 500 is now up 35.7% from its March 23 low and is down only 10.3% from its February 19 high (Fig. 1). Investor confidence in the improving economic outlook helped...

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Stock Market Keeping Score in the Three-Front War Against the Virus

We are still in the midst of VWW-II, the second world war against the coronavirus. VWW-I occurred from 1918-19 as the world battled the Spanish Flu pandemic. It is estimated that about 500 million people, or one-third of the world’s population, became infected with the Spanish Flu virus. The number of deaths is estimated at 50 million worldwide, with about 675,000 in the US. In some ways, the damage from VWW-I exceeded the destruction resulting from WW-I. So far during VWW-II, 4.1 million...

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Fed Eats Buffett’s Lunch

In my recent conference calls with our accounts, I’ve been making the case for investing in crony capitalism. This system differs from entrepreneurial capitalism where the business of companies is to compete with one another fairly and squarely for their customers’ business. Entrepreneurial capitalists who fail to do so go out of business. Those who succeed prosper. The problem is that successful entrepreneurial capitalists tend to become crony capitalists when they pay off politicians to...

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The Twilight Zone: Where Is Everybody?

The very first episode of The Twilight Zone aired on CBS on October 2, 1959. It was titled “Where Is Everybody?.” The TV series was created by Rod Serling and broadcast from 1959 to 1964. Wikipedia observes: “Each episode presents a stand-alone story in which characters find themselves dealing with often disturbing or unusual events, an experience described as entering ‘The Twilight Zone,’ often with a surprise ending and a moral. Although predominantly science-fiction, the show’s...

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Fed Trying To Contain Zombie Apocalypse It Created

Creating the Zombie Apocalypse. Fed Chair Jerome Powell is doing an admirable job of playing the action hero in “2012 Zombie Apocalypse,” a 2011 film about a fictional virus, VM2, that causes a global pandemic. He is doing whatever it takes to stop the zombies from killing us by ruining our economy and way of life. In my recently released book Fed Watching for Fun & Profit, I defined the zombies as living-dead firms that continue to produce even though they are bleeding cash. In a...

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From Reach for Yield to Mad Dash for Cash to Rebalancing into Stocks

We live in an age of future shocks. It wasn’t too long ago that everyone seemed to be reaching for yield in the bond and stock markets. Actually, that was evident as recently as January 17 of this year, when the yield spread between high-yield corporate bonds and the 10-year US Treasury bond fell to 322bps, the lowest since October 8, 2018 (Fig. 1). That was followed by a mad dash for cash, as evidenced by the jump in this spread to 1,062bps on March 23, which was the highest reading since...

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Tech Is Going Even More Viral

Anyone who wasn’t a tech addict before the Great Virus Crisis (GVC) turned our lives upside down certainly is now. For many of us, working from home has only emphasized our need for fast wireless connections to the cloud. Cocktails and conference calls via Zoom have helped us connect despite the separation. And Netflix and video-gaming systems have kept the whole family entertained. Technology has become a GVC staple, right up there with food and toilet paper. The tech names helping us...

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