Most recently, Yardeni has been arguing that some of the best bull markets have “climbed a wall of worry,” and this situation is no different.
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.
“We’re already at my target. At the end of last year, I talked about 2400 to 2500 by the end of this year which was a pretty bold forecast at the time. Here we are coming down on 2500,” said Yardeni. “I think by the middle of next year we’ll be looking at 2600-2700.”
If he’s right, that range would be a five to nine percent increase for the S&P 500’s current levels.
But, it’s a viewpoint that’s not shared by other esteemed financial market veterans.
Nobel laureate and Yale University Economics Professor Robert Shiller told CNBC last week that he will “lie awake worrying” about the stock market.
“We have seen phenomenal earnings growth right now. Analysts are forecasting a continuation of that. So, I don’t know what is driving earnings,” said Shiller. “I would be skeptical that they would continue at such a blistering pace. History shows that big earnings increases like this have a tendency to revert to trend.”
Yet, Yardeni is holding firm with his forecast and doesn’t see much derailing the rally – not even a White House failure to pass a tax reform package.
“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.”