S&P 500 could hit 8,000 by the end of the decade: Ed Yardeni

The bull market is officially two years old, and as investors head into year three, Yardeni Research Head Ed Yardeni explains what could lie ahead.

Yardeni expects earnings to continue to push the market higher, especially since valuations are “really stretched.” He adds that if valuations increase, it could trigger a crash, which he told Yahoo Finance: “You can still make a lot of money from here. But then you have to know when to get out. And then you have to do it.” “Going out very noticeably.”

Overall, he expects earnings to drive market growth and support a bull market: “I think the market is bullish on earnings and that earnings, which were probably around $250 a share this year, will go up to $275 a share next year, and $300 a share next year.” Next to that, by the way, by the end of the decade, I think we could get to $400 per share, which takes us to 8,000 on the S&P 500 (^GSPC) by 20 times or so so I think it’s still a bull market.”

With this market backdrop, Yardeni explains that it is overweight in Technology (XLK), Industrials (XLI), and Financials (XLF). On the other hand, he is “not too keen” on utilities and other interest rate-sensitive areas: “We don’t think interest rates will go down as much as the market does.”

Watch the video above to hear Yardeni’s take on the bond market (^TYX, ^TNX, ^FVX).

To see more expert insights and analysis on the latest market movements, check out more market domination overtime here.

This article was written by Melanie Riehl