Ed Yardeni warned that while the recent stock market correction has ended, the conflict surrounding the Strait of Hormuz will keep markets volatile through the summer.
“It’s hard to imagine this is really over in the next few days or even the next few weeks. It could still be pretty messy,” the veteran market strategist said, predicting a “consolidation pattern” as peace talks turn into a game of brinkmanship.
Despite his near-term caution over the unpredictability of the war, Yardeni is sticking with his year-end S&P 500 (SP500) target of 7,700, representing roughly a 9% gain from recent levels.
He said the biggest technology companies have reasserted their dominance and continue to “call the shots” for the broader market, describing them as “stocks for all seasons” that attract investors during periods of economic uncertainty.
The market is supported by surprisingly resilient corporate earnings and massive amounts of cash on the sidelines ready to buy dips.
“Earnings kept rising, even during the selloff—it was almost like analysts didn’t get the memo about the war,” Yardeni said, adding that he doesn’t expect the S&P 500 (SP500) to retest its March 30 low.
Yardeni identified the recent selloff as a moment of capitulation, using sentiment as a contrarian indicator to call the rebound.
“When sentiment collapses like that, it’s usually a sign the worst is behind us,” he said, citing his track record of calling market bottoms at their most grim moments, including in 1982 and March 2009.
U.S. markets tracking ETFs: (DIA), (DDM), (DOG), (DXD), (SDOW), (SPY), (VOO), (IVV), (RSP), (SSO), (UPRO), (SH), (SDS), (SPXU), (QQQ), (QQQM), (TQQQ), (QID), and (SQQQ).
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.