Episode summary
Single Best Idea with Tom Keene: Ed Yardeni & Constance Hunter | Bloomberg Surveillance
Bloomberg Surveillance
· · 5 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Ed Yardeni, Constance Hunter
Summary
The discussion centers on a market that is rising despite a wall of worries: a 5% 30-year bond, Brent crude near 108, and inflation running at 3.8%. The host argues that the mix of geopolitical tension, sticky prices, and bond-market pressure has not broken the rally, because earnings and market positioning continue to support risk assets.
The bullish case comes from the view that skepticism itself is healthy. One guest says this is the kind of bull market built on concern, where bearish sentiment can be a contrarian positive. That same view points to a market being “thrust up” by earnings and suggests the upside could keep extending if fears about consumers, capital spending, and the Middle East do not turn into outright panic.
The other major thread is inflation. A second guest says inflation is likely to get worse and expects second-quarter inflation to average above 4.2%. That matters politically as much as economically, because the guest argues higher inflation would feed directly into the debate over the administration’s handling of the economy. Copper’s move to a new high reinforces the message that inflation and growth pressures remain front and center.
Key takeaways
- The host frames the market as a “wall of worry” rally, with earnings still overpowering fears about bonds, geopolitics, and consumer demand.
- Ed Yardeni says bearish sentiment can be constructive and argues the market is being “thrust up” by earnings rather than complacency.
- Constance Hunter expects inflation to be above 4.2% on average in the second quarter and says it is “going to get worse.”
- Hunter argues higher inflation could become a political liability for Biden as voters react to persistent price pressure.
- Copper’s new high is presented as another sign that inflation and growth pressures are still active in the market backdrop.
Notable quotes
“We definitely are climbing a wall of worry and that's the best kind of bull market you can have”
“We think it's going to be above 4.2% average for the second quarter”
“It's painful and it's going to get worse”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news, single best idea, an extraordinary set of conversations as a president attends China. I believe tomorrow within our show will be when the president lands uh in Beijing. We'll have to see on that as we move forward.
But all sorts of conversations wrapped around a 5% 30-year bond wrapped around a print of 108 on Brent crude earlier this morning and more than anything wrapped around 3.8% inflation. And Eric Winigrad of Alliance Bernstein was quite heated that there's rich people inflation and poor people inflation. and he would model out poor people inflation is a very painful 5% plus.
It is a most unusual time. Ed Jardenni with all of his decades of work on economics and market strategy suggests higher for stocks. Here is Ed Yardeni of Yardeni Research.
We definitely are climbing a wall of worry and that's the best kind of bull market you can have. Uh you don't want everybody being bullish. You want people to to have concerns.
Um I I don't want people to to to worry uh on a personal level. Uh but on a professional level uh when I see a lot of bearishness from a contrarian perspective, it usually works. Uh I made some my best calls on market bottoms uh when my when my gut was hurting and everybody was uh was was in a in a panic mode.
Um, so, uh, we're not in panic mode right now, but on the other hand, there are a lot of people worrying about, uh, what's going on in the Middle East. And I'm not saying that's what not worrisome, but it's it's certainly adding to the concerns. Uh, they're worrying about the bond market.
Um, they're they're worrying about a a K economy that the consumers not going to continue to spend, and they're working worrying about too much capital spending.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- single best idea
- economy
- markets
- finance
- investment outlook
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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