Ed Yardeni said Wednesday the S&P 500’s advance reflects “fabulous earnings momentum,” not speculative excess, arguing investors are responding to profit growth rather than chasing hype.
A forward price-to-earnings ratio of 20 to 22 looks reasonable, he said, if the US economy avoids a recession over the next few years.
Yardeni coined “FEMO” — fabulous earnings momentum — to contrast the current market with “FOMO,” which he described as a hope-and-hype driven rally lacking fundamental support.
The call pushes back on a central Wall Street concern that elevated US stock valuations signal a bubble rather than a fundamentals-backed expansion.
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