Veteran bull Ed Yardeni says stocks can fall another 10-15% but the market will then make a 'comeback'
- Wall Street indices saw their biggest weekly fall since late June last week, and economist Ed
Yardenithinks a 10-15% correction awaits.
- But the president of
Yardeni Researchdoesn't think that's a bad thing.
- He said: "I'm actually somewhat comforted by the market taking a break here. It's a healthy development."
- He thinks technology
stocksmay stage a "comeback" even if his predictions are realized.
- Visit Business Insider's homepage for more stories.
Economist Ed Yardeni expects stocks to fall by another 10-15% after last week's technology-led sell-off but he thinks that is not necessarily a bad thing.
The president of Yardeni Research, a long-time equities bull, told CNBC's "Trading Nation" Friday: "The market has had a huge move since March 23. The Nasdaq is up something like 70%. That's a melt-up. It's not as big as what we had in 1999 when we had over 200%."The Nasdaq rose around 400% between 1995 and early 2000 because of a rush into
August interview with Business Insider. Read more: Bank of America lays out the under-the-radar indicators showing that huge swaths of the stock market are 'running on fumes' — and warns a September meltdown may just be getting started
While he said a drop of another 10-15% wouldn't be surprising, Yardeni said the fundamentals for the tech sector remain strong and a potential coronavirus
"It has been disconcerting to see that five stocks account for 25% of the market cap of the S&P 500," said Yardeni. "But those are the stocks that are actually getting corrected here and are leading the way on the way down."He maintained his forecast for the S&P 500 to hit 3,500 points by the end of the year. This is just 2% higher than Friday's close just shy of 3,427.
Last month he told Business Insider: "As long as the perception is that the global economy is recovering, then
"We may very well see a broadening into what people call 'value stocks' — more specifically into financial stocks, for example," Yardeni said. "But that doesn't mean that technology doesn't make a comeback as well. There is so much cash out there that was raised during the mad dash for cash in March, and that has been provided by fiscal and monetary policy," he concluded.
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