Yardeni Research President Ed Yardeni Talks Markets, Earnings Momentum

Summary

Podcast Summary: Bloomberg Talks

Episode: Yardeni Research President Ed Yardeni Talks Markets, Earnings Momentum

Date: August 12, 2026
Host: Bloomberg
Guest: Dr. Edward Yardeni, President of Yardeni Research

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Episode Overview

This episode features renowned market strategist Dr. Edward Yardeni sharing his perspectives on the current state of equity markets, earnings momentum, Federal Reserve policy, global investment opportunities, and the psychological barriers that prevent investors from fully participating in the market. With both macro and sector views, Dr. Yardeni offers insights into why he believes we’ve entered a “roaring 2000s,” how AI is broadening market gains, and why skepticism about higher-for-longer rates may be misplaced.

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Key Discussion Points

1. Market Sentiment: From Pessimism to Euphoria

[00:39 – 01:53]

• The host references John Templeton’s quote about market cycles: “bull markets are born in pessimism, grow on skepticism, mature on optimism, and die on euphoria.”
• Dr. Yardeni asserts that the market is closer to euphoria than in previous years, but:

  “The euphoria is what I call F.E.M.O.—fabulous earnings momentum. It's not FOMO.” — Dr. Yardeni [01:12]

• Strong earnings, not inflated valuations, are driving current enthusiasm.
• Index performance: S&P 500 (market cap-weighted) up 12–13%, equal-weighted up 15%—a sign of broadening participation.

  “The market’s broadening... I call the 493—the impressive 493—as doing very well, which shows the market’s broadening.” — Dr. Yardeni [01:54]

2. Sectors Leading the Charge and AI Influence

[01:54 – 02:36; 07:00 – 07:48]

• Beyond the “magnificent seven” tech names, “impressive 493” in S&P 500 are performing very well.
• Financials, industrials, and health care at all-time highs; benefiting from AI:

  “Financials, industrials, health care are all at record highs… if any sector badly needs to manage information, better needs AI, it’s got to be health care.” — Dr. Yardeni [07:02] “Industrials are just benefiting from the ongoing AI boom, which I think is the real deal.” — Dr. Yardeni [07:43]

• Financial industry investing heavily in fintech and payments technology.

3. Fed Policy and Rate Environment

[02:36 – 04:58]

• Dr. Yardeni expects a September rate hike but not aggressive tightening:

  “I don’t think it’s going to be aggressive… The markets are expecting a September rate hike, and I think the bond market would react positively.” — Dr. Yardeni [02:48]

• Remarks on “rates are normal”:

  “4 to 5% is normal. This is where they should be... It’s actually a vote of confidence. It shows that the economy can function very well...” — Dr. Yardeni [04:22]

• Suggests it's healthy that the market is now setting rates post-quantitative easing.

4. U.S. vs Global Markets

[05:05 – 05:57]

• Until late 2025, Yardeni favored “staying home” with U.S. stocks, but shifted to seek global opportunities:

  “I can’t really recommend overweighting the US when it accounts for 65% of the MSCI global market cap. Let’s talk about looking for opportunities overseas.” — Dr. Yardeni [05:22]

• So far performance is “even Steven” between US and non-US stocks; sees a “global bull market in stocks.”

5. Investor Psychology & Participation

[05:57 – 06:48]

• On how skeptical or fearful investors (“glass half empty crew”) can participate:

  “They have to stop listening to the Perma Bears. They’ll get you out at the top, in the middle, and at the bottom. If your day job’s not trading, you’ve got to be long.” — Dr. Yardeni [06:17]

• Host and Dr. Yardeni agree: staying out of the market is akin to “never participating in the American experiment.”
• References Nobel laureate Robert Shiller’s work on investor behavior.

6. Geopolitical Concerns & Market Resilience

[07:48 – 08:29]

• While geopolitical risks persist, Yardeni points out historical resilience:

  “History shows that geopolitical crises are buying opportunities. The market actually bottomed a few months after Pearl Harbor... This time around, the market bottomed on March 30 and we haven’t really looked back.” — Dr. Yardeni [08:00]

7. Personal & Lighthearted Moments

[08:29 – 09:13]

• Listener asks about Dr. Yardeni’s dogs coping in the heat:

  “We take them out for like five minutes, and then they knock on the door and beg to come back in... They’re couch potato dogs—Charles Cavaliers.” — Dr. Yardeni [08:37]

• Joking discussion about vet visits, Venmo, and his dog’s sleep apnea.

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Notable Quotes

• “The euphoria is what I call F.E.M.O.—fabulous earnings momentum. It’s not FOMO.” — Dr. Yardeni [01:12]
• “The market’s broadening... the impressive 493 are doing well, which really shows the market’s broadening.” — Dr. Yardeni [01:54]
• “4 to 5% is normal. This is where they should be... It’s actually a vote of confidence. It shows that the economy can function very well.” — Dr. Yardeni [04:22]
• “History shows that geopolitical crises are buying opportunities.” — Dr. Yardeni [08:00]
• “They have to stop listening to the Perma Bears... If your day job’s not trading, you’ve got to be long.” — Dr. Yardeni [06:17]

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Timestamps for Key Segments

• [00:39] Market sentiment and bull market phases
• [01:07] Earnings momentum vs. valuation-driven euphoria
• [01:54] Market broadening beyond top tech stocks
• [02:36] Fed policy expectations and market implications
• [04:22] Interest rate “normalization”
• [05:22] Global vs. U.S. equity opportunities
• [06:17] Advice to skeptical investors
• [07:02] Sector leadership: financials, industrials, health care, and AI
• [08:00] Geopolitical history and buying opportunities
• [08:37] Personal moment: Dr. Yardeni’s dogs

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Conclusion

Dr. Edward Yardeni remains optimistic about both the U.S. and global equity outlooks. He emphasizes the current market’s foundation on strong, broad-based earnings, rejects the notion that today’s interest rates are abnormally high, and encourages investors not to let fear or “Perma Bears” keep them out of long-term market gains. Sectors like financials, industrials, and health care—especially those integrating AI—offer robust opportunities. Historical perspective on geopolitics and a dash of personal charm round out a lively, insightful episode for listeners seeking market wisdom in uncertain times.

Transcript

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Studios Podcasts Radio News Edward Yardening with us.

[Podcast Host]

We just had Ben Laidler on who nailed the Christmas Eve 2018 call. Then there was a pandemic and Mr. Yarden climbed on board October of 22 and said it is the roaring 20s. John Templeton, I mentioned this week on my Twitter thing, bull markets are born in pessimism, grow on skepticism, mature on optimism, and die on euphoria. How close to euphoria euphoria Are we?

[Dr. Edward Yardeni]

Dr. Yeah, I mean clearly we're closer to euphoria now than we were at the beginning of what I still think will be called the roaring 2000s. And I think we're seeing that though this time around. The euphoria is what I call female. It was just fabulous earnings momentum. It's, it's not FOMO. The P is actually hung around at 20 for a while. It's earnings have been phenomenal. And then this morning we just heard that some of these companies are continuing to, you know, have home runs.

[Co-host/Guest]

Have home runs. Absolutely. We Corey, with core Wave last night. Yeah, yeah, I'm looking at the SPX, you know the, the weight, the normal weighted up 12, 13% but the equal weighted.

[Podcast Host]

Yeah.

[Co-host/Guest]

Is up 15%.

[Dr. Edward Yardeni]

That's right.

[Co-host/Guest]

That's a good sign. Right.

[Dr. Edward Yardeni]

So very, very good sign. It's very healthy. And you know, I call, I call the 493. You know, there's a magnificent seven and then there's the impressive four 93 and this so far this year they're doing very well, which really shows that the market's broadening. And I think, you know, I think people have a fatigue to a large extent. They don't really know which companies are going to be the winners or the losers. So they're kind of maybe buying indexes on technology. But the other companies in financials, industrials, health care, those sectors are at all time record highs and that's because people understand their businesses and they also figure they might actually benefit from AI.

[Co-host/Guest]

Yeah, I think everybody's trying to figure out the winners and losers. It doesn't appear that the Fed's going to help the market here? I guess it's a question of will they potentially hurt the market by aggressively raising rates. What's your.

[Dr. Edward Yardeni]

I don't think it's going to be aggressive. I think the, the markets were sort of surprised when during the first FOMC meeting that was chaired by the new Fed chair and that is Kevin Warsh where he came out so hawkish and said that his number one priority was to have price stability because he admitted that the Fed has failed to get down to 2% for over five years. And then in July he said it again and the market said well you said that in June, now why don't you do something in July. And so I think the markets are expecting a September rate hike and look, I think the bond market would react positively to it which then would be a positive for the stock market.

[Podcast Host]

You thank you so much for joining Bloomberg MONEY weeks ago. We had a huge response to that in the single year Denny sentence Paul that stopped traffic on a Friday afternoon was rates are normal. Where rates are now is what they're

[Dr. Edward Yardeni]

supposed supposed to be companies.

[Podcast Host]

This is important concept. I want you to take it back to Yale Dynamics linking economics into investment in finance. Companies can operate in a legitimate real interest rate, nominal interest rate environment. Yeah. A lot of the younger who don't think so they don't believe.

[Dr. Edward Yardeni]

Yeah. Or well something that does kind of get get my, my attention is these days is when people say oh, interest rates are going to stay higher for longer which implies that they should be lower. You know it's just we're going to,

[Co-host/Guest]

I say we're going to be frustrated.

[Dr. Edward Yardeni]

But so what do you mean higher for longer? That 4 to 5% is normal. This is where they should be. This is where they were. The 10 year was before the great financial crisis it was between 4 and 5%. Before the inflation crisis of the 70s it was 4 to 5%. 4, 4 to 5% is actually a vote of confidence. It shows that the economy can function very well. And by the way it's kind of refreshing to see that the capital markets have been liberated from quantitative easing so that they can actually vote on what where rates should actually be. And right Now I think 4 to 5% is as a positive sign and

[Co-host/Guest]

we're seeing these the new issuance in the investment grade bond market is off

[Dr. Edward Yardeni]

the charts and it's been absorbed very very well.

[Co-host/Guest]

How about us versus non us? I'm looking at my WTI function and there's good returns out there around the world and maybe Some better valuations outside

[Dr. Edward Yardeni]

the U.S. yeah, well, we were pushing the idea of stay home over with the US from 2010 until late last year. So we missed the rotation to go global. But we kind of. I think we caught up. We'll see. Maybe I got whipsawed, but in December of last year said, you know what? I can't really Recommend Overweighting the US when it accounts for 65% of the market cap of the global MSCI. So I said let's. Let's talk about looking for opportunities overseas. And so far this year, it's kind of been even Steven. I mean, you know, it has been one or the other. Well, I mean, look, we got a global bull market and stocks. That's really what's going on.

[Podcast Host]

I want you to address, as I did, I think it was Friday, the glass half empty crew. They need to participate. They need to retire.

[Dr. Edward Yardeni]

Yeah.

[Podcast Host]

They need to be in the game. But their mental framework from childhood, whatever.

[Dr. Edward Yardeni]

Yeah.

[Podcast Host]

Just isn't Yardeni like, yeah, well, how do they participate?

[Dr. Edward Yardeni]

They didn't have a happy childhood to a large extent. Look, I think they have to stop listening to the Perma Bears. The Perma Bears will get them out at the top, they'll get them out in the middle, and they'll get them out of the bottom. You'll never be in the market if you kind of constantly get scared by the. By the Perma Bears with stocks if it's right. If your day job's not trading, you've got to be long.

[Podcast Host]

Dr. Yudani says there never be in the market. I would rephrase it broader, Paul, and say never participate in the American experiment.

[Dr. Edward Yardeni]

Yeah, correct.

[Podcast Host]

To me, it's a broader.

[Dr. Edward Yardeni]

It's a broader. Yes.

[Podcast Host]

It's like almost a Robert Shiller kind of thing.

[Co-host/Guest]

Exactly. If people are looking for opportunities outside of the trade, where do you kind of send them these days?

[Dr. Edward Yardeni]

Well, I'm not that original. I mean, I just kind of look at all the sectors and see which ones are new high. So I kind of let the market guide me. And financials, industrials, health care are all at record highs. At the end of last year, we raised health care to a market overweight. And that's because we figured if any sector badly needs to manage information, better needs AI, it's got to be health care.

[Co-host/Guest]

Tell me.

[Dr. Edward Yardeni]

But financials are spending billions of dollars on fintech and I'm really tired of getting checks from my clients. I mean, I love getting. Getting the money, but you know, why don't I just get Venmo for everybody by now. So I think there's a lot of productivity gains and industrials, of course, are just benefiting from the ongoing AI boom, which I think is the real deal.

[Co-host/Guest]

What's your concern out there? I know you've been bullish and you've been right. Yeah. What's the concern out there for you?

[Dr. Edward Yardeni]

Well, you know, I mean, geopolitics, it

[Co-host/Guest]

seems like the markets plowed through.

[Dr. Edward Yardeni]

Yeah, well, you know, I think those of us who have been doing it for a while and those newbies who haven't and are getting instructed in history. History shows that geopolitical crises are buying opportunities. The stock market actually bottomed a few months after Pearl harbor when we blasted the Japanese navy in Midway. And that was way before the war was over. And yet the market already. And look what happened this time around. The market bottomed on March 30 and we haven't really looked back.

[Podcast Host]

Mrs. Keene emails in. Can you ask Ed, how are the dogs in the heat? You got four dogs. How do you do you take them out in this heat?

[Dr. Edward Yardeni]

Yeah, well, we take them out for like five minutes and then they knock on the door and beg to come back in. But you know, it's.

[Bloomberg Audio Announcer]

The

[Dr. Edward Yardeni]

dogs are couch potato dogs. They're Charles Cavaliers. So they like to be home in the air conditioning for sure.

[Podcast Host]

Venmo, the vet, I mean, how do you. I mean, how many wire transfers can you see the.

[Dr. Edward Yardeni]

Well, I've recently, I've recently been reaching out trying to get a vet who's an expert in sleep apnea because Bailey snores and it's very hard to fall asleep when she's snoring there.

[Co-host/Guest]

Danny household.

[Podcast Host]

There you go with your dog up. Four dogs. It's not a three dog night with that Yardeni. It's a four dog night. He is Yardeni Research who protect the copyright of all of our guests.

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