Yardeni Research President Ed Yardeni Talks State of the Market

Edward Yardeni argues the bull market is driven by 'FEMO' (Fabulous Earnings Momentum), not speculative FOMO. He sees the economy as resilient due to retiring baby boomers spending $89 trillion in assets, large fiscal deficits, and a productive AI capex boom. He reaffirms his S&P 500 target of 8,250 by end of 2025 and 10,000 by 2029, calling it a 'Roaring 2020s' scenario.

implicit

Oil

Metals

USD

Yardeni Research 4.0
Financial Media
Ed Yardeni 8.0

Yardeni Research President Ed Yardeni Talks State of the Market | Bloomberg Talks

US equities

S&P500 → 8250
S&P500 (end-2029) → 10000

ndx

Yardeni's bullish S&P 500 targets (8,250 by end of 2025, 10,000 by 2029) imply a strong tech-heavy Nasdaq. His view that AI capex will pay off and that FEMO drives the market supports a long-term up direction for NDX.

rut

Yardeni's bullish macro view on the economy (resilient consumer, baby boomer spending, fiscal stimulus) supports small-cap performance. His S&P target implies broad market strength, which typically lifts the Russell 2000.

yields

Large fiscal deficits ($1.5-2T) and a resilient economy suggest upward pressure on yields. However, Yardeni's view that the Fed will maintain consensus and not tighten aggressively tempers the direction to cautious up.

Mike (Host)

Asks what has been most true across the bull market that won't go down.
Edward Yardeni

The bull market won't go down because earnings won't go down; earnings are resilient because the economy is resilient.
Mike (Host)

Asks if the market is getting a free launch from stimuli that goose revenues to generate free cash flow.
Edward Yardeni

Yes, $1.5-2 trillion government deficits are stimulative, but also a very strong consumer driven by retiring baby boomers with $89 trillion in retirement assets.
Mike (Host)

Asks how to think about AI here, given many say it's bigger than anything we've seen.
Edward Yardeni

AI is not a revolution, it's an evolution in the digital revolution that started in the 1960s with IBM mainframes. Data is now a fourth factor of production (land, labor, capital, data).
Mike (Host)

Asks if we can feel comfortable with the earnings environment to continue to support the market.
Edward Yardeni

We are better off with a bull market based on FEMO (Fabulous Earnings Momentum) than FOMO (Fear of Missing Out). FOMO inflates PEs and creates bubbles; FEMO is sustainable.
Mike (Host)

Brings up the Fed's dot plot, referencing a past dinner with Richard Berner, and asks if the dots are efficacious.
Edward Yardeni

As a Fed watcher, he likes the dot plot for insight into the committee's thinking, but notes the long-term neutral rate estimate has no science behind it (spread of 3-4% among 19 members).
Mike (Host)

Asks about Mr. Warsh's power to shift the dialogue at the Fed.
Edward Yardeni

The dialogue at the Fed will remain the same, but how much gets communicated to the public is the focus. The Fed will be more independent, but Warsh has come around to needing a consensus.
Mike (Host)

Reads an email asking Yardeni to reaffirm his Roaring 2020s scenario and S&P target.
Edward Yardeni

Reaffirms S&P 500 target of 8,250 by end of 2025 and 10,000 by end of 2029. The Roaring 2020s is working out and getting more roaring.

SignalTube

markets at a glance