3 Reasons Why the Bull Market in Stocks Will Continue, According to Ed Yardeni 1. Positive fundamentals: Economic growth is strong, corporate earnings are rising, and interest rates are low. These factors are all supportive of stock prices. 2. Technical factors: The stock market has been in a bull market since March 2009, and there are no signs of a reversal. The market is making higher highs and higher lows, and it is trading above its 200-day moving average. 3. Investor sentiment: Investors are bullish on stocks. They are buying stocks at record levels, and they are not selling them. This positive sentiment is likely to continue to drive the stock market higher.Ed Yardeni Bullish on Stocks, Cites Strong Earnings and AI BoomEd Yardeni Bullish on Stocks, Cites Strong Earnings and AI Boom Ed Yardeni, president and chief investment strategist of Yardeni Research, remains optimistic about the stock market’s rally. He believes that the rally will continue due to reasonable valuations and continued earnings growth. AI, a Key Driver of Growth Yardeni highlights artificial intelligence (AI) as a reason for his bullish stance. He believes that the benefits of AI will spread to more companies, leading to increased earnings growth. Earnings Expectations Rise Analysts’ forward earnings expectations have reached a record high, indicating that the market rally is supported by strong corporate profits. Yardeni notes that analysts now estimate S&P 500 earnings per share at $261.74. Improving Market Breadth While the rally has been driven by a few mega-cap tech stocks, Yardeni expects market breadth to improve. Positive three-month changes in forward earnings for S&P 500 companies have risen to a bull-market high, suggesting a broader market expansion. Valuations Not Stretched Despite the S&P 500’s high forward price-to-earnings multiple, Yardeni argues that the median forward price-to-earnings multiple of the index is just 17.8x. He believes the broad market is not overvalued and could continue to rise through the end of the decade with improved earnings and a higher valuation multiple. S&P 500 Earnings Growth Outlook Yardeni predicts solid earnings growth for the S&P 500 in the coming years, estimating $250 per share this year, $270 next year, and up to $400 by the end of the decade. Similarities to the Dot-Com Boom Yardeni acknowledges some similarities between the current market and the 1990s dot-com boom, but he believes that the Federal Reserve’s willingness to lower interest rates if the economy weakens will prevent a similar crash. Conclusion Ed Yardeni believes that the stock market rally is far from over and expects continued record highs driven by reasonable valuations, strong earnings growth, and the AI boom.Bull Market Momentum to Persist, Predicts Yardeni Prominent economist Ed Yardeni outlines three key factors underpinning the ongoing bull market in stocks: 1. Strong Economic Growth: * Positive economic data, including robust job growth and low unemployment, indicate a supportive environment for corporate earnings. 2. Low Interest Rates: * The Federal Reserve’s accommodative monetary policy has kept interest rates low, making debt financing more affordable for businesses. 3. Corporate Profitability: * Companies continue to report solid earnings growth, driven by efficient cost management and increased productivity. Yardeni believes this trend is sustainable in the near term. Yardeni emphasizes that while market volatility is inevitable, the underlying fundamentals remain strong, supporting his belief that the bull market will extend into the foreseeable future. He cautions investors against panic selling during short-term downturns and encourages a long-term perspective.