Fundamental Stock Market Indicator - Yardeni Research

Stock Market Briefing: Fundamental Stock Market Indicator

Yardeni Research, Inc.

January 20, 2022

Dr. Edward Yardeni

516-972-7683 eyardeni@

Joe Abbott

732-497-5306 jabbott@

Please visit our sites at blog.

thinking outside the box

Table Of Contents Table Of Contents

Fundamental Stock Market Indicator

1-3

January 20, 2022 / Fundamental Stock Market Indicator

Yardeni Research, Inc.



Fundamental Stock Market Indicator

Figure 1.

1/15

70

YRI BOOM-BUST BAROMETER & CONSUMER COMFORT INDEX

260

Boom-Bust Barometer*

60 Consumer Comfort Index

240

220 10/13

200

180

50

160



140

120

40 100

80

60 30

40

20

20

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

* CRB raw industrials spot price index divided by initial unemployment claims, four-week moving average. Source: Bloomberg, Commodity Research Bureau, Department of Labor.

Figure 2.

0

CRB RAW INDUSTRIALS vs INITIAL UNEMPLOYMENT CLAIMS

400

800

700 1/15

1/18

650

1200

600

1600 550

2000

2400

500

2800 450

3200

3600

400

4000

4400

CRB Raw Industrials Spot Price Index

350

(1967=100)

4800

300

5200

Initial Unemployment Claims

(4-week ma, thousands, sa, inverted scale)

250

5600

6000

200

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: Bureau of Labor Statistics and Commodity Research Bureau.

Page 1 / January 20, 2022 / Fundamental Stock Market Indicator

Yardeni Research, Inc.



Fundamental Stock Market Indicator

Figure 3.

400

S&P 500 INDEX & BOOM-BUST BAROMETER*

4800

1/19

4600

4400

4200

S&P 500 Index

4000

300

Boom-Bust Barometer

3800

1/15

3600

3400

3200

3000

2800 200

2600

2400

2200

2000

1800

100

1600

1400

1200

1000

800



0

600

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

* CRB raw industrials spot price index (weekly average) divided by weekly initial unemployment claims, showing four-week moving average. Source: Commodity Research Bureau, Bureau of Labor Statistics, and Standard & Poor's.

Figure 4.

210

S&P 500 INDEX & FUNDAMENTAL STOCK MARKET INDICATOR

200

190 S&P 500 Index

10/13

5000

4800

1/19 4600 4400

4200

180

4000

Fundamental

3800

170

Stock Market Indicator*

3600

3400 160

3200

150

3000

2800

140

2600

2400

130

2200

120

2000

1800

110

1600

1400

100

1200

90

1000

800



80

600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

* Average of Consumer Comfort Index (which is a four-week average) and the four-week average of Boom-Bust Barometer, which is CRB raw industrials spot price index (weekly average) divided by weekly initial unemployment claims. Source: Bloomberg, Commodity Research Bureau, Bureau of Labor Statistics, and Standard & Poor's.

Page 2 / January 20, 2022 / Fundamental Stock Market Indicator

Yardeni Research, Inc.



Fundamental Stock Market Indicator

Figure 5.

210

S&P 500 FORWARD EARNINGS & FUNDAMENTAL STOCK MARKET INDICATOR

200

S&P 500

190

Forward Earnings*

180 Fundamental

170

Stock Market Indicator**

121/8206 170

10/13 160

150

140

160

130

150

120

140

110

130

100

120

90

110

80

100

70

90

60



80

50

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

* 52-week forward consensus expected operating earnings per share. Time-weighted average of the current year's and next year's consensus forecast. ** Average of Consumer Comfort Index (which is a four-week average) and the four-week average of Boom-Bust Barometer, which is CRB raw industrials

spot price index (weekly average) divided by weekly initial unemployment claims. Source: Bloomberg, Commodity Research Bureau, Department of Labor, I/B/E/S data by Refinitiv.

Figure 6.

350

330 S&P 500 FORWARD EARNINGS & BOOM-BUST BAROMETER (weekly)

310 290 270 250 230

230 1/13

220

210

1/15

200

190

180

210

170

190

160

170

150

150 140

130

110

130

90

120

70

110

50

S&P 500

100

30

Forward Earnings* 90

10

80

-10

Boom-Bust Barometer**

-30

70

-50

60



-70

50

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

* Time-weighted average of consensus estimates for the current year and next year. ** CRB raw industrials spot price index (weekly average) divided by weekly initial unemployment claims, showing four-week moving average.

Source: Commodity Research Bureau, Bureau of Labor Statistics, and I/B/E/S data by Refinitiv.

Page 3 / January 20, 2022 / Fundamental Stock Market Indicator

Yardeni Research, Inc.



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