It’ll be one of the best Christmas seasons ever: Ed Yardeni
Long-time market bull Ed Yardeni delivers a dose of optimism at the end of the year.
Yardeni, who is known for leading the investment strategy of Prudential and Deutsche Bank, expects the holidays to propel stocks deeper into record territory.
“This will be one of the best Christmas seasons ever,” the president of Yardeni Research told CNBC’s “Trading Nation” on Friday. âPeople are still coming out of this pandemic mentally and they need to spend. And, I think they realize they need to spend now because if you get too close to Christmas, a lot of the merchandise can be. out of stock.”
He expects a willingness to spend despite rising inflation.
âConsumer confidence has been weak and inflation has eaten away at wage gains,â Yardeni said. “But the reality is that some of the lowest income workers in America are seeing some of the best pay increases they may have ever had.”
He speculates that high-income workers with solid savings add to the ability of consumers to offset inflationary pressures.
Yardeni’s baseline scenario is that inventories will continue to rise and price pressures will ease once supply chain issues are resolved.
âCompanies are doing a great job of cutting and cutting costs and keeping profit margins at record levels,â he said. “It’s very, very impressive.”
The highly technical Dow Jones, S&P 500 and Nasdaq ended the week at record highs. The S&P 500 is at 4,697.53, up 25% year-to-date. It is also 2% of Yardeni’s year-end target.
“The market is changing quite quickly here”
âI have 4,800 for the S&P 500 by the end of this year or the end of next week. I’m working on the timing. The market is moving pretty quickly here, then 5,200 by the end of the year. next year, “said Yardeni, who is also the author of the new book” In Praise of Profits !. “
Yardeni’s last positivity comes 17 months after her “Sunshine” market call on “Trading Nation”. Amid the lockdowns of Covid-19 in the spring of 2020, he predicted that a “fairly large bull market” was ahead.
Now, he suggests that the biggest hardships associated with the pandemic are behind the United States.
“Enough people have been vaccinated for the economy to be doing well. It’s really not seeing that the pandemic is hampering economic growth,” Yardeni said. “This is probably another reason why we have yet another movement to record highs in the market.”
Yardeni continues to recommend overweighting equities. Over the next 12 months, he enjoys the value that mid and small cap stocks offer investors. It also lists tech, finance, and energy as its top picks in the S&P 500.
âWe envision a continuation of the bull market,â Yardeni said.