Market Maverick: Dr. Ed Yardeni Reveals Bold S&P 500 Predictions for 2024 and a Shocking 2025 Target

[00:00:00] The stock market was a roaring performance last year when we saw the S&P 500 up 24%, leaving

[00:00:12] many on Wall Street scratching her head wondering what happened and why didn't they predict

[00:00:16] it.

[00:00:17] We're our guest today, not only forecasted, he accurately predicted it and he is joining

[00:00:22] us today because he has all kinds of surprises to tell us for 2024.

[00:00:27] Welcome everyone to Buy Hold So. Excuse me. Dr. Ed, you get the victory lap, but the thing that always, most impressed me is that, you know, on other financial media show, we say, they'd have a clip of like Mike Wilson talking about, you know, the 3,800 and the 3,600. And then they'd have you on about, you know, two segments later and you'd be the nicest guy in the world,

[00:01:42] because that's your nature.

[00:01:43] Whereas I would have said, well, holy crap,

[00:01:45] number one, has he been year when the interest rates, well, years changed, where the beginning of the year since really started in 2022, when the Fed started raising interest rates aggressively. That's when all the pessimists really came out and said, well, this has got to cause a recession. And I've been around for a while

[00:03:01] and I remembered back in the mid eight the economy has had a lot of employment strength in those areas. And I think they've missed the demographics. I think they missed the fact that there was a pandemic and the pandemic had some consequences of causing an inflation spike, which was a spike. I believe that it was transitory and so it has come to pass so far.

[00:04:23] Yeah. Well, I've been working on feel like that the past couple of years. But I think by the end of the decade, we're going to look back and include that technology solved a very big problem for us. We have a shortage of labor, particularly skilled labor. And productivity, I think, has already started to make a comeback

[00:05:41] in terms of productivity growth. And if I'm right two soils, you know, the strike. So I just, I well this country continues to do despite the clowns in Washington. That's really the amazing thing. And what I tell people is like you and I, wake up in the morning, we go to work and all we want to do is do good for ourselves, our families,

[00:08:22] our communities, our customers. And we do that. About, yeah, but we also have the law of large numbers when it comes to, I went to part time to school in Arizona State, we have a common stuff there who came up with this idea that, you know, network effects really work. And as your network effect gets stronger, your customer time is stronger,

[00:09:40] your profit margin goes up, and the incremental sales,

[00:09:42] particularly when you're adding different software products

[00:09:45] in there, is zero.

[00:09:46] And how can you know what, I think maybe it's going to stall out for a little while. So instead we had a 10% correction. I came pretty close to calling the bottom in that correction. And we had ended up at almost 4800. Didn't quite make a new high in the S&P 500.

[00:11:03] Now I think we are going to make a new high Yeah, if people are. You're the new FDR. Well, I think sentiment is important. And I think to the extent that we had a melt up rally at the end of last year, I think we need to digest it for a while. And so I do think the market's going to be sideways, maybe

[00:12:21] even with a mini correction of 5%.

[00:12:24] But I think by the end of the year,

[00:12:27] in the second half, we're the really good rally. By Hold Cell, brought to you by Cross-Check Management. On any given day in Washington, policy proposals are created, debated, and decimated by tens of thousands of people and organizations working behind the scenes. On 80 Proof Politics, a guest and I will visit a DC watering hole and distill the art of

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[00:15:04] authors, podcasters and influencers to help you reach that exciting next chapter. Listen that a little bit because you have this number that's out there, 5,400 on your target for the S&P 500. It is an election year. We're hearing a lot of people talk about rate cuts. Are you taking how much is that being attributed to your forecast? Well, it's rather independent of what happens

[00:16:20] in Washington. Again, my view is it's amazing how that in 2020, that might be ahead. And then all of a sudden this inflation monster occurred. I argue that it was probably going to be largely related to the pandemic and that would abate and that we will resume the roaring 2020 scenario. And I think that's worked out pretty well, certainly in the stock market.

[00:17:43] But again, we've had some pretty controversial presidents of late. you're in, but the 250 for this year, and then 270 for 225, and then 300 for 226, which is really what drives my optimism on where the S&P can go. And that's because of the structure of the economy, the structure of the companies?

[00:19:01] Absolutely.

[00:19:02] I've got this notion that when you invest, you have to kind of confirming that companies are doing a really good job of dealing with some of these challenges of cost inflation. I work with a company called Blue couldn't do what we're doing without technologies. As a matter of fact, I think one of the things that's unique about our company is we've got this really cool chart system where that automatically updates the charts when the data becomes available. We don't have to do a thing and it automatically gets uploaded onto our website.

[00:21:41] So we have this section called our charts, and that take too much of your time. So I just did a commercial. I'm sorry about that. There you go. No, it's great. It's cool. It's cool. Todd, I'm sorry. Go ahead. No, no. The question for you, though, is that with yardeniquitex, I am curious, your clients are, because we keep talking about the five trillion dollars that's sitting in

[00:23:03] money markets. Yeah.

[00:23:04] Of your clients, they're clearly, they're seeking think of the market here? So I think that's sort of a healthy development. On a short-term basis, there are too many bulls in the market, but there's still a lot of people that aren't participating. A lot of people that might have listened to Wall Street's pessimists and never got the call to get back in.

[00:24:20] Those people are sitting in money market fund saying, hey, at least I'm getting 5%.

[00:24:25] Well, some of them might be 4%. 2023 numbers, I'm saying. So you know that all that interest in your taxable account, you're going to have to pay taxes on. Yeah. And a number of these people are from California and are very high income. So you didn't earn 5%. I just want to share that with you. Yeah, that's right. And in relation, you got a negative return.

[00:25:43] And did anyone ever explain that to you?

[00:25:45] No.

[00:25:46] Yeah.

[00:25:47] That's right. percent and even a yield around here is fairly attractive if I'm right and that inflation isn't going to go back up. It's going to keep coming down and with productivity making a comeback, we can actually have some deflation, which isn't a bad thing. Central bankers have this bizarre obsession about avoiding deflation, but deflation can be related to

[00:27:02] productivity, could be related to an abundance of resources because of technology. in the US but done an economy-wide recession. But China has had a very bad recession. They've had a property bubble at burst that's bigger than anything Japan did or the United States did. And they're experiencing deflation. And you know what? We still buy a lot from China and we're importing a lot of deflation from China. So, so, goods inflation came right back down

[00:28:23] once the ports got cleared and once people decided,

[00:28:25] you know what?

[00:28:26] We don't need any more goods.

[00:28:27] Let's go traveling. But I'm sure it is a good thing for us. There are national security issues involved there. And I think we're gonna find that the technology is gonna solve the global problem of scarcity of cheap labor. I like it, well this is excellent. Well, terrific guidance, Dr. Ed.

[00:29:40] As always, every time you're on the show,

[00:29:43] I know the audience gets a lot out of it.

[00:29:45] So how can the audience find's not restrictive. Mortgage rates are are down. And I think we're going to see some activity there. industrials look good from the onshoring perspective. And whether you like it or not in terms of what the Biden administration has has done on the fiscal side, the reality is there's a lot of money

[00:31:03] being thrown at onshoring, which is great for industrials. So go with the flow.

[00:32:05] badly had ended. Well, we still have some time and we'll discuss that possibility along the way. I'm not denying that things can go wrong. I've been in the near term. I'm very concerned about

[00:32:09] what's going on in the Middle East and how that's becoming a regional war. I am very concerned about

[00:32:15] the debt and the deficit, but I'm pointing out that, you know, it's not something that's going to

[00:32:22] cause a calamity immediately, but it is certainly a concern. So, you know to the Jones Act, which is the bedrock of the American maritime industry. On the American Maritime podcast, we cover the topics that matter most to the 650,000 men and women of American maritime while also being accessible for the average listener to learn about this industry.

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