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Yardeni: S&P 500 Will Reach 5,000 by Year-End or Sooner

Stock-watcher Yardeni says he doesn't expect a correction, but says if there is one it should be used to add on.

Prominent stock watcher Ed Yardeni continues to believe that the S&P 500 index will reach 5,000 by year-end amid strong earnings.

And it could happen sooner, the president of Yardeni Research told CNBC Friday.

“I have to these days say ‘or sooner,’ because every time I put out a bullish target the bulls stampede all over my back, and they get there a lot sooner because earnings have been so strong,” he said.

The S&P 500 recently stood at 4,497, barely changed. A move to 5,000 would represent an 11% increase from the recent level. The index has jumped 20% year to date.

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As for earnings, 87% of S&P 500 companies exceeded analysts’ forecasts for the second quarter, according to FactSet.

Some analysts say the market is due for a pullback, but Yardeni disagrees. “I’m not in the correction camp,” he said. “But when they happen, I hope people use that as an opportunity to buy some more.”

To be sure, it’s not early in the stock rally, Yardeni said. “The market has doubled since March 23 of last year, so it’s not going to double again anytime soon. It could consolidate for a while, instead of having a correction.”

Unlike Yardeni, Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, is looking for a correction -- to the tune of 10% to 15% before year-end.

“The issue is that the markets are priced for perfection and vulnerable, especially since there hasn’t been a correction greater than 10% since the March 2020 low,” she wrote in a commentary.