Introduces Ed Yardeni, who raised probability of market meltdown to 35% for rest of year. Asks if that changes after President's comments.
speaker1
speaker2
The 35% meltdown probability doesn't change. Iran has been at war for 47 years and isn't ready for unconditional surrender. The market is too willing to take one news cycle and sell oil off.
speaker2
Conflict could last weeks, not months. Iran is strangling itself by blocking its own oil exports and imports. Ceasefire will come, but not unconditional surrender.
Asks about bear market and recession scenario despite Yardeni's long-term bullish outlook.
speaker1
speaker2
We're still looking at something like a 10-15% correction. Bear market (20%+) can't be ruled out. Oil shocks tend to cause recessions and bear markets.
Asks what Yardeni expects Fed to do and where rates are going, given inflation far above target and could rise further.
speaker3
speaker2
Fed is between Iran and a hard place. War is pushing up energy and gasoline prices, threatening inflation pickup. Fed can't do much. Even a new Fed chair won't be able to convince anyone to lower rates.
Notes software ETF flipped from +7% to -2% after President's speech. Asks if fog of war pushes us back towards tech for safety.
speaker1
speaker2
Back to pandemic-like environment where Magnificent 7 did well due to moats. AI has forced them into an arms race. Tech must be done selectively. Corrections and bear markets are buying opportunities.
Asks about gold selling off when it should be a hedge. Asks if rally is done and if it's now speculative rather than store of wealth.
speaker3
speaker2
Gold is both store of wealth and speculative. Still using $6,000 by end of year and $10,000 by end of decade.
Asks if gold is still the hedge for the market now, and what other good diversifier exists given bonds haven't worked.
speaker1
speaker2
There isn't a lot of good diversification, so you're forced to grin and bear it. Still a long-term bull market. Still using 7700 in S&P by year-end and 10000 by decade-end. Not giving up on roaring 2020s scenario.