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S&P 500 could end the year around 4,300 level: Ed Yardeni

S&P 500 failed to break above its 200-day MA this week but Ed Yardeni (President of Yardeni Research) says the possibility of it ending the year around 4,300 level still remains on the table.

Why does he expect a further rally in coming weeks?

If true, that would mean another 8.0% upside from here.

His constructive view is based on resilience of the U.S. economy and consumer spending that continues to be fairly strong in the face of inflation and aggressive rate hikes. On CNBC’s “Closing Bell: Overtime”, Yardeni said:

It’s a stock picker’s market. What’s making a different is resilience of the economy. Everybody’s debating whether we’ll have a soft or hard landing. Meanwhile, there’s no landing whatsoever. Consumer just didn’t get the recession and keeps spending.

He refrained from calling it a start of a new bull market, though.

Yardeni is not seeing a meaningful recession ahead

Yardeni quoted the monthly employment and wage data to reiterate the resilience of the U.S. economy. Up to $2.0 trillion in excess savings also give him confidence that the market could rally further in the coming weeks.

Yardeni is convinced that the economic news moving forward will pour cold water on the much talked about “recession is coming” debate.

Economic data ahead will show there’s no hard landing. There’s barely even a soft landing. We’ll continue to get evidence that inflation is moderating pretty sharply. Durable goods inflation has come down, price of energy continues to be downwards.

Earlier this month, consumer prices were reported sequentially up but not as much as expected for October.  

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