As we kick off a new trading month and get ready for the jobs report later this week, the markets are buzzing with excitement and anticipation. Ed Yardeni, the president of Yardeni Research, shares his insights on the post-earning season and what we can expect for the rest of the year.
With 98% of the S&P 500 companies already reporting their earnings, the results have been better than expected. Analysts were initially predicting a 1 to 2% increase in earnings, but the actual numbers came in closer to 6 to 8%. This has led to a positive outlook for earnings in the coming years, with analysts raising their estimates for this year, next year, and beyond.
Yardeni has set yearend targets of 5400 for the S&P 500 by the end of this year, 6000 by the end of next year, and 6500 by the end of 2026 as part of his Roaring 20s analysis. He believes that we are still in the early stages of a bull market, with strong productivity and profit margins driving the market higher.
While some may draw parallels between the 2020s and the 1920s, Yardeni cautions against predicting a similar crash. He points to the Smoot-Hawley Tariff Act of 1930 as a key factor that contributed to the Great Depression and emphasizes the importance of avoiding geopolitical risks, such as trade wars, in the current market environment.
Overall, Yardeni remains optimistic about the future of the market but acknowledges the potential for risks. As we navigate through the uncertainties of the global economy, it is essential to stay informed and vigilant to protect our investments and ensure long-term success in the market.
