Episode summary
Ed Yardeni Still Sees S&P 10,000 by 2029. So Why Is He Getting More Cautious?
Excess Returns
· · 59 min · Hosts: Justin Carbonneau, Jack Forehand · Guests: Ed Yardeni
Summary
Ed Yardeni still sees a strong earnings-led bull market and keeps his long-term S&P 500 target of 10,000 by the end of 2029, but he is more cautious in the near term because of higher oil prices, stickier inflation, and rising bond yields. He says the economy remains resilient because consumers keep spending, capital spending tied to AI is strong, and a large federal deficit is also supporting activity. In his framework, “FEMO” — fabulous earnings momentum — is healthier than a melt-up driven by fear of missing out, and recent gains have come from earnings rising faster than valuation multiples have fallen.
He argues that the Roaring 2020s thesis rests on no recession, with baby boomers retiring, spending heavily, and supporting the consumer through wealth and intergenerational transfers. Yardeni also sees AI as an evolutionary extension of the digital revolution, not a one-time bubble, and thinks it could raise productivity by turning data into a fourth factor of production. He favors the “impressive 493” beyond the Magnificent Seven because AI benefits should spread through the market as competition drives down costs.
On rates and macro risk, he says today’s yields look more like a return to normal than a crisis, though he is watching for the “bond vigilantes” to force fiscal discipline. The biggest threats to his base case are a debt scare, an energy shock, or some other event that could hit consumers and earnings.
Key takeaways
- Yardeni still expects the S&P 500 to reach 10,000 by 2029, but he pushed his 8,400 target to mid-2027 because of higher oil and yields.
- He says the bull market is being driven by “FEMO” — fabulous earnings momentum — rather than speculative FOMO.
- He argues baby boomers are powering a “G-shaped economy” by retiring with record wealth and continuing to spend.
- Yardeni thinks AI is evolutionary, not revolutionary, and believes it will eventually boost productivity by making data a fourth factor of production.
- He sees today’s higher bond yields as more “normal” than dangerous, unless fiscal deficits trigger a bond-vigilante revolt.
Notable quotes
“the economy remains very strong and the reason it remains strong is consu consumers continue to do what they do best which is consume”
“I coined a uh term for it and that is FIMO a fabulous earnings momentum uh to distinguish it from FOMO”
“I'm still talking about the roaring 2020s and an S&P 500 target of 10,000 by the end of the decade”
“Now, we've got a fourth factor of production, and that's data”
“I think uh if that's if that's a kind of a current events question, I'd say I'm not a big believer in the Kshaped economy”
How the episode opens
Ed, good afternoon. Thank you very much for joining us once again on Excess Returns. — Thank you.
Since you came on with us last December, a lot of things have happened. We've had the war with Iran. Oil has gone over $100 a barrel.
The Fed is actually hiking interest rates now and the 10 years over 5%. How are you making sense of everything that's happening in the market and underneath the surface? Well, I think that first and foremost the economy remains very strong and the reason it remains strong is consu consumers continue to do what they do best which is consume and capital spending is very strong because of AI and oh by the way we have a very large federal deficit of $1.7 trillion over the past 12 months.
So there's clearly a lot of cylinders working here to keep the economy growing. That in turn means that earnings have been very strong actually surprisingly strong. So much so that I coined a uh term for it and that is FIMO a fabulous earnings momentum uh to distinguish it from FOMO.
FOMO is fear of missing out and that's what typically uh drives um maybe meltup scenarios. Uh you don't want to miss the the rally that everybody else is making money in. FEMO is a much healthier uh driver of a bull market in stocks because it's earnings driven and we've had this very unusual situation this year where earnings have been so strong that uh investors almost didn't believe it and uh they haven't been they haven't been doing a FOMO.
They haven't been chasing earnings up and the valuation multiples have actually been going down but not as much as earnings have been going up. So we've had an earningsled uh bull market.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- sp 500 target
- earnings momentum
- bond yields
- ai productivity
- diesel inflation
Companies and tickers mentioned
- Yardeni Research
Watch the episode
Watch “Ed Yardeni Still Sees S&P 10,000 by 2029. So Why Is He Getting More Cautious?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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