Ed Yardeni, president of Yardeni Research, said that despite being among the market's bulls, he "hasn't been bullish enough" on stocks.
During a CNBC interview, the veteran strategist pointed to extraordinarily strong earnings as the primary driver of the current rally, describing the market as being in "FEMO" mode—fabulous earnings momentum—rather than FOMO.
Yardeni emphasized that an earnings-led rally is far healthier than one driven purely by expanding valuations.
"I would rather have an earnings-led melt-up than a valuation-led melt-up," he said, noting that multiples have remained relatively stable around 21 while earnings have consistently exceeded expectations.
Analysts are projecting 20% expected earnings growth for S&P 500 (SP500) companies over the next seven quarters.
The resilience of the U.S. consumer has been a key factor supporting the economy and corporate profits, Yardeni explained.
Even as gasoline prices (XB1:COM) climbed to $4 or $5 per gallon, consumer spending remained robust. He attributed much of this strength to retiring baby boomers, who hold approximately $89T in net worth.
"You just don't want to ignore and underestimate the resilience of the U.S. economy and the U.S. consumer," he said.
The economy has also weathered significant headwinds, including aggressive Federal Reserve interest rate hikes from near zero to 5.5% and geopolitical tensions in the Middle East. While the rate increase triggered a bear market in 2022, a recession never materialized.
"The bear market didn't last very long. It was a great buying opportunity," Yardeni noted.
Looking ahead, Yardeni remains committed to his "roaring 2020s" thesis, which he has championed since August 2020, including a target of 10,000 for the S&P 500 (SP500) by the end of 2029.
He views the successful $75B SpaceX IPO (SPCX) as a positive signal for market liquidity and investor appetite.
"Bring it on. We're going to get more IPOs. They're going to be big, and the market looks like it's going to be able to handle it quite well," he said.
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.