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Yardeni: Market 'Melt-up' May Push Stocks 9 Percent Higher


By    |   Monday, 31 July 2017 01:07 PM

Newsmax Finance Insider Edward Yardeni predicts that a stock “melt up” will push prices up to nine percent higher.

The veteran market watcher told CNBC that the S&P 500 could top 2,500 by next year. The index was trading near 2475.42 near midday Monday.

The Newsmax Finance Insider sees little risk stemming from DC's political turmoil, such as President Donald Trump's stalled economic agenda.

Yardeni explained that the most recent record highs for the Dow Jones, Nasdaq and S&P 500 indices aren't being driven by a surge in valuation multiples.

"The fundamentals are just cranking along at a decent pace here. Earnings are doing remarkably well given that the economic data looks kind of slow. But somehow or another, companies are generating good revenues and good earnings. I think that's because the global economy is doing reasonably well," Yardeni recently told CNBC's "Futures Now."

Yardeni, along with his colleague Joe Abbott, have been keeping track of the number of "panic attacks" in the S&P 500 since the beginning of the bull market more than eight years ago. And, he's up to 56, CNBC reported.

"We're already at my target. At the end of last year, I talked about 2,400 to 2,500 by the end of this year which was a pretty bold forecast at the time. Here we are coming down on 2,500," said Yardeni. "I think by the middle of next year we'll be looking at 2,600-2,700," he said, predicting a five to nine percent increase for the S&P 500's current levels.

"The markets have pretty much discounted that we don't want to bet too much on Washington providing us with more stimulus or tax reform," Yardeni said. "The market is doing well on its own just on the fundamentals. So, I'm not convinced that if we get more evidence that nothing is going to happen on the tax front that the market is going to go down."

However, other respected economic voices disagree on just how a stalled Trump agenda would influence the economy.

U.S. companies are likely holding back on investing in their businesses due to an uncertain outlook for government policies, Federal Reserve Vice Chairman Stanley Fischer said on Monday.

Speaking in Rio de Janeiro, Fischer said uncertainty over the outlook for health care, regulation, taxes and trade could prompt firms to delay projects until the policy environment is clearer.

Fischer did not mention the administration of President Donald Trump by name, Reuters reported.

Trump has pledged to overhaul health care, regulation, taxes and trade, but has had little success in getting his agenda through Congress.

One reason U.S. firms are investing tepidly despite low interest rates is because gains in worker productivity appear to be slowing, Fischer said.

"But elevated uncertainty, both political and economic, has likely also played a role," Fischer told a closed-door conference.

(Newsmax wires services contributed to this report).

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Newsmax Finance Insider Edward Yardeni predicts that a stock “melt up” will push prices up to nine percent higher.
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Monday, 31 July 2017 01:07 PM
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