InvestIdeas

From tech to bitcoin, long-time bull Ed Yardeni worries a meltdown will strike the market

by Stephanie Landsman

Edward Yardeni is concerned the market will get smoked.

The long-time bull, who spent decades running investment strategy for firms including Prudential and Deutsche Bank, is comparing Wall Street euphoria to the height of the dot-com bubble in 1999.

“It’s just part of the bull market in everything,” he said. “It’s very important whether you’re in or not in bitcoin to just stare at the chart, and realize when it’s going straight up — it’s certainly a sign of exuberance, of speculative excess.”

“The first half of this year, the blue wave will probably continue to be bullish,” he noted. “We’re going to get more government spending.

We’re going to have the Federal Reserve front a lot of that government spending through quantitative easing. I think interest rates will remain pretty low.”

“In the second half of the year, we may be on the lookout for some consumer price inflation which would not be good for overvalued assets,” he said.

Source: CNBC

https://www.cnbc.com/2021/01/10/from-te ... KW,4FK4V,1

Reddit rebellion is a sign of ‘irrational exuberance,’ but market bull Ed Yardeni suggests it’s different this time

“It is just one of many signs of speculative excess... irrational exuberance of a sort,” said Yardeni.

“If you make a list of all the speculative things going on, it kind of gets you a lot of bells and whistles suggesting that it’s time to get out or cash in or take some profits.”
Yet, he suggests it’s too early to turn bearish.

“The earnings recovery this year and next year will still give us a multiple of 22x, 23x, which is where we are now.

It’s not a cheap multiple by any sense of the past, but what is different this time is interest rates and inflation rates are low” .

Source: CNBC

https://www.cnbc.com/2021/02/07/reddit- ... rdeni.html

Stocks could soar 30% in the next 2 years if 'mob psychology' doesn't spark a meltdown, market vet says

by Jennifer Sor

The S&P 500 could notch 6,500 by 2026, according to market vet Ed Yardeni.

The Yardeni Research president said he was "rooting" for the bull market to continue steadily higher.

But stocks risk a "meltup" as AI investor exuberance gets out of control, he warned.

Source: Business Insider

https://finance.yahoo.com/news/stocks-c ... 33640.html

Trump 2.0

We believe that Trump 2.0 represents a major regime change from Biden 1.0 (or was that Obama 3.0?).

The corporate tax rate will be lowered from 21% to 15%.

Personal income from tips, overtime, and Social Security, might not be taxed. Many onerous regulations on business will be eliminated…

We expect that better economic growth will boost federal government revenues and that Elon Musk will succeed in slowing the growth in federal government spending. GDP growth might actually keep pace with mounting government debt…

So, we are changing the subjective probabilities of our three scenarios as follows:
1. Roaring 2020s (55%, up from 50%)
2. 1990s-style meltup (25%, up from 20%) and
3. 1970s-style geopolitical and/or domestic debt crisis (20%, down from 30%).”

While this is bullish, let’s be clear…

A 20% chance of a 1970s-style debt crisis is hardly insignificant. And Yardeni is quick to point toward Fed officials who are “oddly oblivious to the strength of the economy, the backup in bond yields and the outlook for more fiscal stimulus” as they proceed down the rate-cut path.

So, while optimistic, we maintain our caution, aware of the risks of a Fed misstep. That said, the potential for economic growth from the Trump administration is supportive of Luke’s medium-term outlook. Here it is as a reminder:

The combination of falling interest rates, pro-growth policies, and strong earnings should propel stocks meaningfully higher in 2025 and maybe even into 2026/27.

Source: Investor Place

Ed Yardeni lifts S&P 500 price target on resilient U.S. economy

by Sam Boughedda

Yardeni Research raised its year-end S&P 500 target back to 7,000, citing the ongoing strength of the U.S. economy and improved market sentiment following President Trump’s resolution of trade tensions.

We bet the resilience of the economy would boost S&P 500 earnings. So far, so good.

Yardeni Research said the “V-shaped stock market rebound since April 9 is discounting the economy’s resilience, which reduces the odds of a recession.

The analysts described the market as undergoing a “slow-motion meltup,” h

The analysts described the market as undergoing a “slow-motion meltup,” helped by “the Fed’s rate cut on September 17 and expectations of one or more cuts before the end of the year.

Source: investing.com

https://www.investing.com/news/stock-ma ... my-4272121

Yardeni warned that the S&P could fall 5% from our recent high through December.

After the S&P 500’s roughly $17 trillion rebound, key market technicals are nearing historic extremes, with the S&P 500 trading as much as 13% above its 200-day moving average, a wide spread that traditionally suggests a rally has gotten overextended, [Yardeni] says.

Source: Bloomberg

Veteran strategist Ed Yardeni sounds off on the Magnificent 7

Warning that the tech giants’ era of runaway earnings dominance is finally catching up.

Yardeni argues that strong competitive pressures are piling up across cloud, chips, advertising and AI.

In a sharp take, he says that “every company is evolving into a technology company,” which means Big Tech doesn’t have that field to itself.

That’s exactly why Yardeni’s “overweighting” the Information Technology and Communication Services sector, preferring market weight for both sectors, while shifting extra chips toward financials, industrials, and an overweight in health care.

Source: The Street

Why Yardeni sees good value in the stock market at current levels

By Vahid Karaahmetovic

The S&P 500’s forward price-to-earnings (P/E) peaked at 23 last October and has since fallen 17.8% to 18.9, while forward earnings over the same period rose 12.7% to record-high territory.

Source: investing.com

https://www.investing.com/news/stock-ma ... ls-4597809