A Rosy Scenario for the Economy

Investment strategist Ed Yardeni outlines an upbeat scenario for the economy and the stock market:

So where do I see the S&P 500 by the end of the year? On Tuesday, Joe and I lowered our forward earnings forecast to $100 per share for the end of this year, down from $103. It is currently at $99.92. So barring a more severe economic downturn than we are expecting, we feel relatively comfortable with this flatline projection. The current forward P/E is 13.6. We think it is more likely to go up than down from here. Indeed, we expect a nice P/E-led rally in stocks later this year if:(1) the price of oil stabilizes south of $150, (2) core inflation remains around 2 percent, (3) headline inflation moderates,(4) home sales and prices stop falling,(5) the Fed holds its fire, (6) the dollar firms, and(7) the global economy continues to expand. We think a big rally could be triggered by a rash of foreign companies acquiring US companies.

Reader Comments Read all comments (1)

Add Your Thoughts

Comment Name State Select One AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY International Email

Please enter the two words below into the text field underneath the image.

Incorrect please try again

Enter the words above: Enter the numbers you hear:

Your comment will be posted immediately, unless it is spam or contains profanity. For more information, please see our Comments FAQ.