Veteran market strategist Ed Yardeni believes the recent pullback in stocks has already run its course.
In a new CNBC interview, Yardeni say he maintains his optimistic outlook for the year, even after recent volatility due to geopolitical tensions and shifting macroeconomic narratives.
“I’m sticking with it. I’ve taken quite a bit of criticism… but basically I stayed with my 7700 S&P 500 towards the end of the year. I thought we could get a 10 to 15% correction and the S&P 500 fell 9%. But there is a way out. That’s what the markets were looking for.
At first they were very concerned that this could become an endless war. There was no clear way out. The obvious way out is for the president to declare we’ve won and go away, and that’s basically what he did… so I think Monday was the low point.”
Yardeni’s call hinges largely on the idea that markets had factored in worst-case geopolitical scenarios, particularly around conflict in the Middle East and potential disruptions to global oil supplies. As these fears begin to subside, he argues, stocks are responding.
He acknowledges that oil prices could remain high, but believes the U.S. economy is resilient enough to absorb the impact.
At the same time, Yardeni says concerns about serious supply disruptions have been tempered by alternative supply routes and ongoing diplomatic developments in key shipping corridors.
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