Millennials, Baby Boomers to Fuel Historic Economic Expansion
$DIA, $SPY, $QQQ, $RUTX, $VXX
Monday, investment guru Ed Yardeni predicted millennials and baby boomers will help the US achieve its greatest economic expansion in history.
“They the baby boomers are increasingly becoming minimalists. They are trading down in terms of houses that they want to live in,
“At the same time, we’ve got millennials who are also minimalists,” he added. “Many prefer to rent and stay in the city, and not buy houses, and not even buy cars.”
Mr. Yardeni explained that the weaker spending should actually be considered a Bullish factor, because it helps prevent the US economy from overheating.
“Put it all together and you’ve got an economy that continues to grow led by consumer spending, but not in a fashion that suggests that a boom is going to lead to inflation, and a Fed reaction that leads to a bust,” he said. “So, all in all, I put it together as still a very favorable environment for stocks.”
Mr. Yardeni also has not been swayed by contagion fears sparked by Turkey’s economic crisis and global trade disputes.
“This all creates a lot of commotion on a global basis. It kind of makes the US look like an island of serenity, all things considered. I think this really favors investing in the US, as opposed to investing on a global basis,” he said.
“The earnings picture really has been phenomenally strong. I’ve been Bullish on earnings, and they coming in even stronger than I expected,” he noted.
“What the stock market cares about most is the business cycle,” Mr. Yardeni said. “As long as investors perceive that the US economy can continue to grow without a risk of recession, you get a Bull market.
Monday, the major US stock market indexes came in at: DJIA -125.44 at 25187.70, NAS Comp -19.40 at 7819.72, S&P 500 -11.35 at 2821.67
Volume: Trade on the NYSE came in at 726-M/shares exchanged
- NAS Comp +13.3% YTD
- Russell 2000 +9.1% YTD
- S&P 500 +5.6% YTD
- DJIA+1.9% YTD
Overall HeffX-LTN is Neutral to Bullish this market now.