has seen an impressive surge, climbing past 6,000 and sparking significant optimism in the financial markets. Unsurprisingly, the rush by perma-bulls to make long-term predictions is remarkable.this upward momentum will continue and has revised his long-term forecast, projecting that the S&P 500 will reach 10,000 by 2029.
Specifically, Yardeni highlights the potential for substantial corporate tax cuts. He suggests that Trump could reduce the corporate tax rate from 21% to as low as 15%, which would significantly boost corporate profitability. Tax cuts and deregulation would help companies expand their margins and grow earnings. As a result, Yardeni predicts a continuation of record-high profit margins for S&P 500 companies, further supporting his bullish outlook on the stock market.
For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. namely 1) supply constraints in the aftermath of the Covid pandemic and 2) commodity cost-push pressures after Russia’s invasion of Ukraine.
“Monopolistic behavior stifles competition, reduces innovation, and limits consumer choice. Furthermore, corporate profitability soared by reducing labor, which is the most costly expense for any business.”may foster an appearance of economic growth, especially when combined with monetary and fiscal policy support, the sustainability of that growth is questionable. Pulling forward growth does work in the short term; however, the void it leaves in future consumption continues to grow.
Here are five steps investors can take to position portfolios for potential market gains if Ed Yardeni’s bullish forecast is correct. However, these steps can also hedge against unexpected economic downturns or market volatility:: Spread investments across various asset classes, including equities, bonds, real estate, and alternative assets. Diversification reduces the risk of being overly exposed to a single market downturn.