Independent Financial Research & Analysis
Daily briefings, 7,500+ real-time charts, and macro insights from Dr. Ed Yardeni and his research team.
Research
Latest Research
Recent insights from our research team
Hawks Versus Owls At The Fed
Today, Ed and Elias share bird’s eye views of the economy from the perches of the hawks and owls on the Fed. The hawks may favor tightening at the FOMC’s September meeting, unconvinced that inflation is on a steady flight path down to the Fed’s 2.0% target. The owls are more confident of inflation’s downward course. July’s subdued inflation readings support their case for holding rates steady in September. But recent labor demand and consumer spending data suggest that the economy is healthy enough for a rate hike, supporting the hawks. August’s data should help clarify whether inflation needs a nudge to return to target or can get there on its own.
GLOBAL MARKET CALL: Momentum Is Back
Momentum is back in the Go Global trade. The rotation that hit the AI-linked stock markets in July has reversed, and the leadership that held for most of 2026 is back in play. South Korea is the clearest sign of this development. The KOSPI is up more than 20% from its July 30 closing low. That ends a brutal stretch. The index fell almost 40% from its June peak as leveraged single-stock ETFs unwound, margin calls cascaded through retail accounts, and regulators halted new listings of the equity products that had fueled the run. Korea’s forward earnings has quintupled in a year, and its forward profit margin now leads the emerging markets'. Here's more: (1) Stay Home vs Go Global. The price ratios of the US stock market to the rest of the world remain below their long-term uptrends from 2010 through early 2025, in both dollar and local currency terms (chart). Since then, they have been in short-term downtrends that remain intact despite recent increases in the ratios. South Korea and Taiwan lead all country ETFs month to date in dollar terms, up 14.4% and 10.9%, with Japan third at 6.3% (chart). Japanese equities have held up despite the joint US-Japan intervention to boost the yen earlier this month, which normally would be a headwind for the stock market of a major exporter. The ytd rankings show the same order with far greater divergence. Korea is up 84.9% and Taiwan 68.5%, with EM ex-China third at 33.9% (chart). The US is up 13.8%, in the middle of the pack. Indonesia is at the bottom, down 32.6%. (2) Fundamentals. The All Country World ex-US MSCI forward profit margin is 12.3%, a record high, up from 9.6% at the start of 2025 (chart). The All Country World ex-US forward earnings is up 36.9% y/y, while forward revenues is up 9.2% (chart). Overseas earnings is growing four times faster than the top line. The US accounts for 53.9% of the All Country World MSCI forward earnings but 64.3% of its market capitalization (charts). Emerging markets are the reverse, at 19.6% of forward earnings against 11.5% of market cap. (3) South Korea. Korea's market leadership rests on soaring earnings growth, not multiple expansion. The KOSPI closed at 6,977.9 on Thursday, 16% above its 200-day moving average. It remains 23% off its June peak (chart). The earnings surge starts with Korea's exports, which soared 63% y/y in July (chart). Forward earnings per share for the South Korea MSCI is soaring along with consensus analysts' earnings estimates for 2026 and 2027 (chart). The forward profit margin is 32.5%, the highest of any emerging economy (chart). It was 5.2% in early 2023. South Korea carries the widest valuation discount of any market, i.e., 15.2 P/E points below the US (chart). Turkey and Brazil follow.
US SECTORS CALL: Stories About Earnings, Margins & Multiples
Energy (OW) led the S&P 500 sectors last week, rising 7.3%. It is up 37.8% ytd, the best of all the sectors. Financials (OW) rose 0.9% and is on an 11-week winning streak. Health Care (OW) and Utilities (OW) also gained last week. Consumer Discretionary (UW) and Materials (OW) fell. Communication Services (MW) was down 1.0% for the week and is up just 1.2% ytd, the second worst of the 11 sectors. Now, let's look at recent developments in the Information Technology, Financials, Energy, and Communication Services sectors: (1) Information Technology. The semiconductors trade rebounded this month. SanDisk is up 35.1% mtd, along with Marvell (18.4%) and Micron (18.1%), all well ahead of the Mag-7 (chart). The y/y growth rates of the sector's forward revenues and forward earnings continue to soar in record-high territory (chart). So far this year, the sector's gains have been driven by forward earnings, while the valuation multiple fell (chart). (2) Financials. We turned constructive on Financials in April. Its ytd performance was the worst of the S&P 500 sectors’ at that time. Financials is now up 6.0% ytd and at a record high. Among its component industries, Life & Health Insurance (up 17.3%) and Investment Banking & Brokerage (14.7%) lead the ytd rally. Financial Exchanges & Data is down 7.9% ytd (chart). The sector's forward revenues and forward earnings are both at record highs. We think AI is a key contributor to the sector's significant increase in the forward profit margin, from around 18.0% in early 2024 to a record 22.1% currently (chart). Meanwhile, the AI trade has spread to Financials. Nvidia announced partnerships on August 10 with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to mobilize over $500 billion of third-party capital to expand AI compute infrastructure. Five of the six are in the S&P 500 Financials sector. Analysts expect the Investment Banking & Brokerage industry’s earnings to grow 30.7% this year and Asset Management & Custody Banks’ earnings to grow 19.8%, compared with 14.7% for the sector as a whole (chart). (3) Energy. We have been recommending overweighting S&P 500 Energy sector as a hedge against geopolitical risks, and it continues to pay off. Oil & Gas Refining & Marketing is leading the way, up 102.6% ytd (chart). Equipment & Services is up 37.5%, Integrated Oil & Gas is up 32.7%, and Exploration & Production is up 26.7%. The sector's forward earnings is up 55.2% ytd, while its forward P/E is down 11.2% (chart). Analysts expect the sector's earnings to grow 78.4% this year, then fall 11.1% in 2027 (chart). Energy is the cheapest of the 11 sectors at a forward P/E of 13.8. It accounts for just a 3.1% share of the S&P 500 market cap versus 4.8% of forward earnings. (4) Communication Services. Communication Services has the second-best projected 2026 earnings growth of the 11 sectors and the second-worst share price performance ytd. Forward earnings is up 24.4% ytd, while the forward P/E is down 19.8% (chart).
Archive
Our Research Library
19 years of daily research, charts, and analysis
Topics
QuickTakes Topics
Timely commentary covering the most important market themes
Charts
Find Any Chart in Seconds
Search across 7,588+ real-time charts with instant visual previews
NIKE: FORWARD REVENUES
S&P 500 TRANSACTION & PAYMENT PROCESSING SERVICES: FORWARD OPERATING EARNINGS PER SHARE
COLGATE-PALMOLIVE: FORWARD PROFIT MARGIN
INTEL: PRICE, FORWARD EARNINGS & VALUATION
Sample charts from our collection of 7,588+ visualizations
Tools
Research Tools
Interactive dashboards for tracking economic conditions and market trends
Beige Book Monitor
Fed economic conditions across 12 districts with traffic-light signals.
FOMC Policy Meter
Dovish-to-hawkish policy stance tracker across FOMC meetings.
FOMC Minutes Monitor
Hawk/dove signal extraction across 10 economic themes.
FOMC SEP Monitor
Fed projections and dot plot distributions across meetings.
FOMC Statements
Every FOMC policy statement since 1997 — full text, rates, and voting records.
Private Credit Monitor
Auto-updating chronology of the private credit liquidity crisis.
Release Calendar
Major publications from the Fed, ECB, IMF, and 12 global institutions.
Try Yardeni Research free for four weeks.
Full access to everything we publish. No credit card, no obligation.