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We’re in a period of no growth, and that worries me: Yardeni

Stocks may have erased their post-Brexit losses, but one market watcher says there's more for investors to be worried about.

"The world just has too much debt, it's got aging demographics and it's got a lot of technology that aims to replace workers," warned Ed Yardeni on CNBC's "Futures Now" on Thursday. "Put it all together and you don't have much inflation and you don't have much growth."

From here, Yardeni envisions a global market where individuals may struggle to find safe havens for their money.

"Plenty of people are working and are hard-pressed to find a place to invest," said Yardeni. "They're all getting stretch marks from stretching for yield."

Indeed, the hunt for global yield remains fairly dire. Japan's entire yield curve is negative with the exception of the 30-year, which stands at about 0.045 percent. In Germany, the 10-year bund hit a new record low of -0.204 percent on Wednesday.

Amid the negativity, Yardeni is concerned that the Fed will continually be impacted by the weakness of global markets.

"In the past, the Fed rarely paid much attention to what was going on around the world," explained Yardeni. "They can't do that anymore."

Yardeni said that, prior to Brexit, Yellen's approach has been dovishly flawed and he expressed frustration over the notion that she can now reference the U.K. referendum when delaying a change in Fed policy. Currently, Fed futures indicate that the odds of a December rate hike are just above 16 percent.

Janet Yellen, chair of the U.S. Federal Reserve
Andrew Harrer | Bloomberg | Getty Images
Janet Yellen, chair of the U.S. Federal Reserve

"Brexit, in some ways, was a very good excuse for her to stay behind the curve," Yardeni said in regard to Yellen's resistance to raising interest rates. Now, he feels her strategy could potentially jeopardize the future for American debt.

"The U.S. bond market is feeling the force of gravity, and the center of gravity these days is negative interest rates," noted Yardeni.

However, as Italy's struggling banking sector leads to further uncertainty, Yardeni feels that the U.S. could remain a strong play for investors seeking a safe haven. Therefore, he feels equities could continue to rise alongside U.S. Treasurys in the near-term. He specifically cited the strength of consumer staples, health care and utilities, all of which have seen gains post-Brexit. In the last month, the XLU, which is mainly comprised of high-yielding American utility companies, including Duke Energy and American Electric Power, is up nearly 4 percent.

"The rest of the world has got a lot of challenges. With regards to our market, clearly we've seen a melt-up in bond prices and a melt-down in bond yields, and that's been reflected in utilities," explained Yardeni. "The U.S. really does stand out. We're doing better than the rest."

In June, the U.S. added 287,000 jobs as unemployment remained steady at 4.9 percent. On Friday's news, both the U.S. 10-year and two-year saw significant gains as the dollar strengthened against the euro, yen and pound.

With this data in mind, Yardeni sought to reassure investors amid the challenges presented by a negative yielding world. He reasoned that, while the bond market activity is troubling, it does not represent darker days ahead.

"[I'm] not convinced that the bond market is signaling a recession in the U.S. or even in the global economy," Yardeni concluded in his recent coverage. "It is confirming that overseas central banks will continue to pursue their ultra-easy monetary policies, and that the Fed will postpone additional rate hikes."

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