Tags: Yardeni | stock | bull | bear

Ed Yardeni: 'We Are All Smart Now'

By    |   Monday, 04 May 2015 06:00 AM

As you're undoubtedly aware, investor sentiment tilts strongly bullish toward stocks now. In the Investor Intelligence Bull/Bear Ratio, the percentage of bears fell to just 13.9 percent this week.

"Everyone is Bullish. Contrarians know that must be bearish," economist Edward Yardeni, president of Yardeni Research, writes in a commentary provided to Newsmax.

"However, everyone has been bullish for a while, yet the S&P 500 rose to a record high of 2,117 on April 24. That's because everyone has finally figured out that fighting the Fed in particular and central banks in general is dumb. So we are all smart now."

Experts agree that the Fed's massive easing program has provided much of the impetus for the S&P 500 to triple in the past six years. Economists don't see the Fed raising interest rates before September.

Stocks should receive a boost from the $1 trillion of corporate buybacks and dividend payouts expected this year, Yardeni explains.

"If we are all bullish, who is left to buy stocks?" he asks.

"There will be a bear market eventually."

With the S&P 500 index hovering less than 2 percent below its record high, many market participants are calling for a correction of about 10 percent. Marc Faber, editor of The Gloom, Boom & Doom Report, is calling for a little more than that.

"For the last two years, I've been thinking that U.S. stocks are due for a correction," he tells CNBC. "But I always say a bubble is a bubble, and if there's no correction, the market will go up. And one day it will go down, big-time."

So what's big-time?

"The market is in a position where it's not just going to be a 10 percent correction," Faber explains. "Maybe it first goes up a bit further, but when it comes, it will be 30 percent or 40 percent minimum."

And you can thank central banks around the world, whose massive easing campaigns have left "all assets are grossly overvalued," Faber argues.

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As you're undoubtedly aware, investor sentiment tilts strongly bullish toward stocks now. In the Investor Intelligence Bull/Bear Ratio, the percentage of bears fell to just 13.9 percent this week.
Yardeni, stock, bull, bear
331
2015-00-04
Monday, 04 May 2015 06:00 AM
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