Edward Yardeni, president Yardeni Research, told CNBC’s “Morning Call” that sound fundamentals and an international economic boom will drive the market higher.
“(The rally is) very real,” Yardeni said Monday. “We’ve got probably the greatest global boom of all time going on right now. The U.S. is benefiting from it, it’s self-sustaining, inflation is remarkably low despite the boom, and earnings are coming in a little better than expected. With interest rates remaining relatively flat in the U.S. and inching up a little bit overseas, I think the market is going higher.”
He said sub-prime mortgage woes aren’t affecting the rest of the economy, and financial stocks did well last week. Strong performance by industrials underscores a worldwide boom in capital spending.
Yardeni believes the S&P 500 will rise to 1,600 by the end of the year.