Original title: "buy a little bit of everything"! Wall Street bulls: the US economy is on the brink of Nirvana S & P will reach 5000 points next year

Source: FX168

Edward Yardeni, a prominent investment analyst and long-time bullish on Wall Street, believes that the US economy is on the brink of Nirvana. He believes that the US economy has been changed by the COVID-19 epidemic, which has improved productivity, so he suggested that investors can still buy US stocks, and the index is expected to reach 5000 points next year.

Despite the uncertainty about inflation and novel coronavirus's variation, the longtime bull believes the epidemic is significantly accelerating the adoption of cutting-edge technologies designed to boost productivity by US companies. Yardeni said the move would lead Wall Street into modern prosperity.

"buy a little bit of everything," Yardeni, who is now president of Yardeni Research, told CNBC. "Corporate earnings will continue to climb to record highs."

However, he also acknowledged that current prices may be difficult to accept.

"look, all the assets have been selected. There's nothing cheap, "he said." it's hard to tell people here that it's time to get in. But current yields will not make bonds look attractive, and they may go higher as I expected. "

Yardeni was in charge of the United States.PrudentialThe investment strategies of financial groups and Deutsche Bank, and used to work for the Federal Reserve Bank of New York. He sees encouraging signs that usually boost the stock market.

"Labor growth has slowed sharply and companies are under tremendous pressure to use technology to offset this impact," Yardeni said. "that means increased productivity. So I have a very optimistic idea, which I think will increase economic activity by 2%. And in the next few years, this proportion will reach 4%. "

As a result, Yardeni believes that wages are rising faster than prices, while profit margins remain high-the secret to strong corporate revenues.

But at the same time, he is also keeping a close eye on the risks of media attention. "the delta variant is clearly in the news, which must be disturbing," Yardeni said. "

Another of his concerns is the rise in prices. He added: "inflation has not yet proved to be temporary and now there is no evidence that it has peaked. As a result, people are still worried about these issues. "

While challenges remain, the Yardeni expects the S & P; to rise 12 per cent from its current level as long as the US avoids another massive economic blockade.

"by the end of next year or earlier, the S & P 500 will reach 5000," Yardeni said. "over the past year, whenever I am optimistic about the future, we will achieve this goal more quickly."

On Friday, the S & P closed at 4468, an all-time high. The index has risen 19 per cent so far this year, up 100 per cent from its low since the outbreak.