ENERGY: A Buying Opportunity We gave up on the S&P 500 Energy sector a couple of years ago. It has been underperforming the S&P 500 since late 2022 (chart). As a result of the latest war in the Middle East, it has been an outperformer since the beginning of this year through

Energy stocks sold off on ceasefire optimism, but oil infrastructure damage suggests prices won't return to pre-war levels even after peace.

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MARKET CALL: Animal Spirits Are Back When Kaiser Wilhelm II's Germany and Tsar Nicholas II's Russia squared off in the summer of 1914, the London Stock Exchange closed for five months. The New York Stock Exchange shut for four months. Investors assumed a continental war would be a calamity. World War I was a calamity for

The Nasdaq just posted its fastest oversold-to-overbought swing in 40 years while oil spikes $5 on Middle East tensions. The S&P 500 is up 12% in three weeks.

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INDUSTRIALS: Earnings & P/E Multiples Boosted By Booming AI, Onshoring & Defense Spending We continue to recommend overweighting the Industrials sectors in the S&P 500, the S&P 400, and the S&P 600. Granted, their valuation multiples are high, but so are their earnings growth rates. The sector's three major indexes all remain on solid uptrends that started in 2022 (chart)

Industrials now trade at a 4.6-point premium to the S&P 500. Historically, they've traded in line or below the broader market.

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ECONOMIC WEEK AHEAD: April 20-24 The week starts with the Strait of Hormuz still the key risk for financial markets. Today, Iranian state media said the Strait has been closed again because the US “did not fulfill their obligations.” Iran had declared it was open on Friday. A renewed US diplomatic push could send senior

This week brings Warsh's confirmation hearing, retail sales, flash PMIs, and consumer sentiment. Meanwhile, the Strait of Hormuz remains the wild card for markets.

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Ed Yardeni 15 likes. "On US Profits, Consumers & Inflation"

Record earnings and resilient consumers keep the economy humming. Even a negative saving rate won't derail spending thanks to Baby Boomers, while rent inflation finally cools.

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Stock Market Highs Confirm US Economy Is A Winner The message from the stock market is clear: The US economy is passing another stress test. Both domestic and foreign investors have shifted their attention from the risks of military escalation in the Middle East back to the remarkably consistent resilience of the US economy. The results are all-time highs

Markets at all-time highs while investors brace for Middle East escalation. Foreign capital keeps flooding into US assets despite the geopolitical noise.

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The Champagne Glass Is More Than Half Full Happy days are here again! The S&P 500 and Nasdaq rose to record highs today, which just happens to be tax day. What's all the excitement about? The AI bubble hasn't burst, so far. Instead, hyperscaler stocks are leading the charge since the stock market bottomed on March 30

Consumer sentiment just hit a record low while retail sales are running the hottest they've been in over two years.

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Mr. Market Says The War Is Over The S&P 500 is now up 1.3% since Friday, February 27, the day before Gulf War III started (chart). So as far as the stock market is concerned, the war is over until further notice. The index will be at a new record high tomorrow if it increases

The S&P 500 is already back above where it was before the war started. Wall Street strategists never even changed their year-end targets.

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ROARING 2020s: Wall Street's Analysts Even More Bullish On Earnings Than Us! The US economy remains resilient, and so do corporate earnings. The US economy has passed several stress tests in recent years. The war in the Middle East is proving to be the latest stress test for the US economy, which seems to be passing it, so far. The macroeconomic data

Wall Street analysts are projecting S&P 500 earnings growth at double the 30-year average. They're more bullish than the bulls.

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MARKET CALL: Yogi Was Right: 'The War Ain't Over Till It's Over' In his seminal work, On War (1832), Carl von Clausewitz famously wrote: "War is the continuation of politics by other means." The US and Iran agreed to a ceasefire in their war and to talks seeking a diplomatic solution. However, their talks failed, and now they are both resuming the

The S&P 500 just bottomed during an escalating war with Iran that sent oil past $100. The target is still 7700 by year-end.

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ECONOMIC WEEK AHEAD: April 13-17 The unresolved Middle East conflict will remain center stage this week. It is having an immediate impact on energy prices in the United States. The US blockade of the Strait of Hormuz will push prices up again at the start of the week. The impact on the US inflation pipeline

Middle East tensions are pushing energy prices higher as the Strait of Hormuz blockade hits markets. All eyes on inflation data and Fed speakers this week.

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FINANCIALS: Private Credit Fears Creating Attractive Values The big money center banks will report their Q1 earnings this coming week. They are included in the S&P 500 Financials sector, which has been the worst-performing one in the S&P 500 this year to date, down 7.3% through April 10, compared with a broadly flat market

Financials are the worst-performing sector this year despite forward earnings at record highs and profit margins second-highest in the S&P 500.

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Anatomy Of The US Labor Market Last week's employment report was widely interpreted as good because jobs growth rebounded and the unemployment rate dropped. Dr Ed and Elias disagree. Our i...

The labor market looks good on the surface, but the real story is more nuanced. Inflation-adjusted earnings are falling while old benchmarks no longer apply.

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How Transitory Is The Inflation Problem Ahead? This evening, Reuters reports that ship traffic through the Strait of Hormuz was well below 10% of normal volumes on Thursday, despite the US-Iran ceasefire. Tehran asserted its control by warning ships to remain within its territorial waters as they passed through the Strait to avoid mines. As we've noted

Stocks are rallying on the bet the war will cool off. But inflation was already heating up before the conflict started, and now there's an energy shock on top of tariffs.

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As Yogi Said: 'It Ain't Over Till It's Over' & 'It's Déjà Vu All Over Again' The fog of war has been replaced by the fog of the ceasefire between the US and Iran. Negotiators for the two countries will meet in Islamabad on Friday. They met many times before without averting the war. The pounding of Iran by the US and Israel has failed to

The S&P 500 is down just 2.8% from its record high despite a war that shut the Strait of Hormuz and sent oil near $100.

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Yardeni Research Chart of the Day (April 8, 2026)

Harsh winter weather dragged on growth from December through February. With that headwind fading, a solid Q2 GDP rebound looks increasingly likely. How much of a bounce are you expecting?

Apocalypse Now, Not! Lowering Recession Odds. Two hours before his latest deadline, President Donald Trump canceled Obliteration Day. He agreed tonight to a two-week ceasefire with Iran. The deal was brokered by Pakistan. Trump confirmed the US had received a 10-point proposal from Iran as a basis for negotiating a permanent peace agreement. Israel separately agreed

Trump just canceled Obliteration Day two hours before the deadline. Markets surged, but the ceasefire lasts only two weeks.

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Yardeni Research Chart of the Day (April 6, 2026)

PMI prices-paid indexes are flashing a warning: CPI inflation may be headed higher in the coming months. Is this rebound transitory or the start of something more persistent?

Yardeni Research Chart of the Day (April 6, 2026)

In the late 1990s, Tech's market-cap share towered 15 percentage points above its earnings share. Today that spread is 1.5 points. Earnings have done the catching up. Is the bubble comparison finally losing its teeth?

Oil Price Shock Boosts March Prices-Paid PMIs Tomorrow night at 8:00 p.m. is the deadline by which Iran must accept President Donald Trump's ultimatum to reopen the Strait of Hormuz or face a US attack on its power plants and bridges. There is no way to predict the outcome. We can't rule out that Iran

Oil prices spiking from geopolitical chaos, yet manufacturing PMI just hit its highest level since 2022. Firms are expanding even as 64% of their comments turn negative.

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Yardeni Research Chart of the Day (April 6, 2026)

History is on the side of the bulls. The S&P 500 rose 31%-44% in the two years after four of six major US military conflicts since WWII. Does history rhyme here?

MARKET CALL: The Tug Of War Between P/E And E Last Monday saw the S&P 500 down 9.1% from its January 27 high, which we believe marks the trough of the latest pullback, for now. That was our call on Tuesday. The next two days could make or break our call. Today, President Donald Trump issued a final,

The S&P 500's valuation multiple fell 18% while forward earnings climbed to a record high. The market priced in recession fears that analysts never shared.

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ECONOMIC WEEK AHEAD: April 6-10 This week will continue to be dominated by developments in the Middle East, though a heavy slate of data releases—including the FOMC March Minutes, February personal income, and March CPI—will compete for attention. President Trump confirmed Wednesday night that the United States could conclude its involvement in the

March CPI on Friday will show how the oil spike hit consumer prices. Meanwhile, Fed Minutes offer a window into policymakers' early thinking on the Iran conflict.

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Bond Vigilantes Are Mobilizing Globally The unprecedented oil-supply shock caused by war in the Middle East has crushed investors’ former expectations for subdued inflation and dovish central banks...

Bond Vigilantes are repricing yield curves worldwide as oil shocks reshape inflation expectations. Global spreads reveal where markets see the biggest shifts ahead.

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Yardeni Research Chart of the Day (April 2, 2026)

Jobless claims data rarely lies. The 4-week moving average suggests March may bring a lower unemployment rate than February's 4.4%. Is the labor market more resilient than the headlines suggest?

Stocks: Was That The Bottom On Monday? On Tuesday night, we suggested that the S&P 500 might have bottomed on Monday, with a pullback of 9.1% (i.e., just under a 10% correction) from its January 27 record high. Tuesday's strong equity rally was triggered by reports that the US had found an exit ramp

The S&P 500 just pulled back 9.1% from its record high. Sentiment indicators are flashing the same buy signal that nailed the bottom last April.

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POTUS Sees An Exit Ramp Up Ahead I. The War and the President's Speech Yesterday, we concluded that the S&P 500's pullback bottomed on Monday, just shy of a 10% correction. The S&P 500 fell on Monday to 6343.72, down 9.1% from its January 27 record high. That low could be retested, but

The S&P 500 just rallied on news the war will end soon. Oil jumped $4 and stock futures fell 0.8%.

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Relief Rally Ends Correction Risk Today's powerful relief rally in the stock market was fueled by news that President Donald Trump intends to declare victory in the war with Iran, according to an article in this morning's Wall Street Journal. Around noon, the market moved higher still on a report that the President of Iran

The S&P 500 just pulled back 9% and the Nasdaq fell 13% during a Middle East war. Corporate earnings expectations kept rising the entire time.

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The War, The Yield Curve, The Fed, Private Credit, and Gold I. The War Carl von Clausewitz, the Prussian general and military theorist, famously observed that "war is a mere continuation of politics by other means." He argued that war is never an end in itself. Instead, it is a tool used by states to achieve a specific political objective. Therefore,

Gold has plunged 15% since the war began, even as geopolitical risk, inflation expectations, and fiscal deficits all point the other way.

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MARKET CALL: Stock P/Es Discounting Higher-For-Longer Oil Prices & Interest Rates The fog of war is getting thicker because of the likelihood of US boots on the ground (the "bog of war"). The US Department of War has deployed 15,000 troops to the war zone, raising the risks of a longer war and more American casualties, which will cause an

Stock valuations are compressing sharply even as earnings estimates keep rising. The S&P 500 forward P/E has fallen 16% while the index itself is down just 8.7%.

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