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The “Roaring ’20s” are back and ready to take the S&P 500 to new heights, says market veteran Ed Yardeni.
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The president of Yardeni Research predicted that the benchmark could reach 8,000 by the end of this decade.
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The upward momentum will be driven by AI and improving corporate profits, he said.
The stock bull market will almost certainly continue through the end of this decade, according to market veteran Ed Yardeni.
Speaking on this week’s David Lin Report, the president of Yardeni Research reiterated his bullish forecast on the stock. The S&P 500 is on track to hit 6,000 by the end of 2025, and could rise to 8,000 by the end of the decade, he predicted, implying another 46% rise for the benchmark index.
A confluence of bullish factors will get him there, Yardeni said, noting that, in his view, the “roaring ’20s” are back.
“I’m still optimistic. I think it’s a bull market… These are all my base case, 60% most likely, roaring 2020 scenario,” he said of his price targets.
Stocks appear to be on a good trajectory given the strength of the U.S. economy, Yardeni said. Despite fears that the United States will fall into a recession, the economy has continued to expand and GDP is expected to grow another 3% this quarter, according to economists at the Atlanta Federal Reserve.
A strong economic backdrop is also fueling confidence in corporate earnings. 12-month earnings expectations on Wall Street are currently at an all-time high, reflecting bullish sentiment among forecasters.
Then there’s growing investor enthusiasm for the potential of artificial intelligence, which has driven mega-cap tech stocks steadily higher over the past 18 months.
“There’s been tremendous excitement around artificial intelligence, and the reality is that technology companies have reported pretty fantastic profits,” Yardeni said, pointing to stellar earnings at companies like Nvidia and Oracle. “The news continues to be very exciting about the technological revolution, which is driving, what I believe, is the happy 2020s,” she added.
Stocks still face some risks in the year ahead. The market has a 20% chance of seeing a “crash” and subsequent “crash” if stocks rise unsustainably, Yardeni said, echoing other forecasters who have warned of a possible market correction after a long streak. stellar performance.
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