Bitcoin price today: gains to $120k, near record high on U.S. regulatory cheer
Investing.com -- Despite weaker-than-expected economic data in recent weeks, U.S. stocks have pushed higher, and Yardeni Research says there are four main reasons why.
“The economic news has been weaker than expected” since early August, noted Yardeni, citing sharply revised payroll numbers and disappointing manufacturing and non-manufacturing PMI readings. Yet the S&P 500 and Nasdaq quickly rebounded.
First, the firm stated that investors are increasingly expecting the Federal Reserve to cut rates in September.
Yardeni notes that “the odds of a Fed rate cut… rose sharply to end the week at 89%,” according to CME FedWatch. Although the firm remains cautious, it concedes a September cut is “more likely.”
Second, recession fears have eased. Yardeni argues the U.S. economy has proven resilient through multiple shocks, from the pandemic to tariffs, and that high valuations can be justified if earnings, not multiple expansion, drive the bull market.
Third, productivity gains are said to be offsetting labor shortages.
Q2 saw a “stronger rebound in productivity,” helping contain inflation, with unit labor costs rising just 2.6% year-over-year, explained the firm.
Finally, Yardeni points to the “Digital Revolution” as a long-term growth driver. They believe artificial intelligence, described as the latest stage of this revolution, could fuel productivity growth of 3–4% annually through the decade, supporting what Yardeni calls a “Roaring 2020s” scenario.
In that outlook, the firm sees the S&P 500 potentially reaching 10,000 by 2030, driven by faster GDP growth, subdued inflation, rising real incomes, and expanding profit margins.
“The Digital Revolution will continue to drive economic growth,” Yardeni concludes, helping explain why stock prices keep climbing despite the soft economic headlines.