Stocks are back in 'meltup' mode after a wild first half — and the S&P 500 could soar 60% by 2030, market vet says
Chaos in markets sparked a lot of bearish prognostications in the first half, but investors have pushed through, and stocks look like they're back in "meltup mode."
That's the view of Ed Yardeni, a longtime forecaster and the president of Yardeni Research. His "melt-up" thesis says the stock market embarked on a 1990s-style bull run starting in 2024, a stellar but ultimately unsustainable stock rally similar to what markets saw at the height of the dot-com bubble.
To Yardeni, the S&P 500 reaching a new record last week confirms that the formation of a speculative bubble is one of the biggest risks to investors at the moment.
Yardeni says he anticipates the S&P 500 reaching 6,500 by the end of the year, a gain of about 5% from levels on Monday. However, by the end of the decade, Yardeni's meltup thesis sees the benchmark index rising to 10,000, representing a 60% gain.
"So far, the current bull market looks like a normal one, with the potential to match the returns of some of the best bull markets since the mid-1960s," Yardeni said.
The upward climb in stocks is partly due to the continued strength of the US economy, the market vet told CNBC on Friday. While some economic data—like retail sales—has come in weaker-than-expected in recent months, that has largely reflected temporary uncertainties like tariffs.
Stocks rallied to records last week on a handful of catalysts. Investors cheered Trump's announcement that the US and China had agreed to a framework trade agreement, and the market continued to rise to fresh records on Monday as investors digested further progress. Canada on Monday said it would cancel a digital services tax that had caused Trump to threaten to end trade talks.
"Clearly, trade isn't a done issue yet, but I think will be by the end of the summer," Yardeni said. "You put it all together and I think it's a pretty solid economy, pretty solid stock market," he later added.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Newsweek
7 minutes ago
- Newsweek
Did Republicans Just Kill the Filibuster?
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Republicans are relying on rarely employed accounting methods to push Donald Trump's "one, big beautiful bill" through the Senate, and in doing so could upend established Congressional procedures surrounding the reconciliation process and the filibuster. Why It Matters The filibuster—a procedural move allowing senators to extend debates on bills indefinitely without a 60-vote majority—has long been viewed as a move to encourage bipartisanship in Congress and as a bulwark against political dominance by slim majorities in the upper chamber. Experts told Newsweek that recent moves by Republicans while trying to pass Trump's tax legislation could create new precedent surrounding the filibuster for years to come, including past the period of GOP control. Senate Budget Committee Chairman Lindsey Graham looks out from the upper chamber, June 11, 2025. Senate Budget Committee Chairman Lindsey Graham looks out from the upper chamber, June 11, 2025. J. Scott Applewhite/AP Photo What To Know Republicans are employing the reconciliation process to pass Trump's tax bill, the centerpiece of his second-term domestic agenda, allowing them to eventually advance the bill with only a majority vote rather than the 60 votes normally needed to do away with the threat of a filibuster. A central element of the bill, which the Committee for a Responsible Federal Budget estimates would add $4.2 trillion to the nation's deficit through 2034, is the extension of the tax cuts enacted during Trump's first term. Sweeping fiscal moves of this kind are traditionally restricted by the Byrd Rule, adopted in 1985, which limits the sort of policies that can be folded into bills passed through reconciliation, and forbids legislation from adding to the nation's deficit beyond 10 years. However, as reported by AP, Congressional Budget Office Director Phillip Swagel recently notified Democratic Senator Jeff Merkley of the Senate Budget Committee that elements of the Big, Beautiful Bill would increase the deficit "in years after 2034." Going by this assessment, the Republican bill would violate the rule that determines what legislation can clear the Senate with a simple majority, which could force Republicans to amend significant portions of the legislation. In response to these concerns, and Senate Parliamentarian Elizabeth MacDonough advising that certain provisions in the bill were not budget-related and therefore in violation of Senate rules, Republicans have now argued that Trump's 2017 tax cuts should be treated as part of the fiscal "baseline" forecast, even though these have not yet been extended. Republicans have also cited Section 312 of Congressional Budget Act to argue that the final authority for determining baseline spending figures, and whether the tax portion of the bill violates Byrd, lies with Republican Senate Budget Committee Chair Lindsey Graham. When approached by Newsweek for comment, a spokesperson for Senator Graham said: "Republicans do not want a $4 trillion tax hike—which is what would happen if the Democrats had their way and the 2017 tax cuts expired." They also referenced past support from Democrats for the notion that the Senate Budget Committee Chairman has the power to establish the baseline, citing former Chairman Bernie Sanders' 2022 remark that "the Budget Committee, through its Chair, makes the call on questions of numbers." Sanders is an independent who caucuses with the Democrats. Experts have said that this new "Byrd Bath"—as it has been referred to by some on Capitol Hill—could establish a new precedent regarding budget reconciliation and the avoidance of filibusters by those in power in the future. "The budget process established in 1974 and reinforced by rules and precedents since then was intended to allow a simple majority to pass a budget as long as the contents of a budget measure were limited to budget-related spending and tax provisions," Steve Smith, professor of politics at Arizona State University, told Newsweek. "Playing partisan games with the budget process to set aside the 10-year budget period or use it for nonbudget purposes is contrary to the plain language of the Budget Act and the Byrd rules adopted by the Senate," he added. "It is a precedent that will get repeated over and over again." Michael Ettlinger, a political adviser who previously worked with the Biden-Harris campaign, said, "If the Republican's new accounting method becomes the norm, it will be far easier to pass deficit increasing legislation in the Senate with a simple majority vote—limiting the impact of the filibuster." Ettlinger, who is currently a senior fellow at the Institute on Taxation and Economic Policy (ITEP), noted that nothing would then stop Democrats from employing the same precedents to bypass the filibuster in future bills. "If the Democrats reclaim the Senate they will have the opportunity to undermine the filibuster as the Republicans have done," he told Newsweek. "It's their choice." Democratic Senator Rubén Gallego, reiterated this argument, posting to X: "There is no filibuster if the Senate [Republicans] do this and when Dems take power there is no reason why we should not use reconciliation to pass immigration reform." What People Are Saying Democratic Senator Ron Wyden, ranking member of the Senate Finance Committee, in a statement released Sunday, said: "The only way for Republicans to pass this horribly destructive bill, which is based on budget math as fake as Donald Trump's tan, was to go nuclear and hide it behind a bunch of procedural jargon. We're now operating in a world where the filibuster applies to Democrats but not to Republicans, and that's simply unsustainable given the triage that'll be required whenever the Trump era finally ends." Steve Smith, professor of politics at Arizona State University, told Newsweek: "If a small Senate majority can put anything in a budget measure or ignore the ten-year budget window, then nothing is left for regular legislation that is subject to a filibuster. It represents a "get-it-while-you-can" partisanship that Republicans have adopted since [Mitch] McConnell became leader that, step-by-step, has undermined longstanding Senate norms." Republican Senator and Senate Budget Committee Chair Lindsey Graham, speaking on the Senate floor on Monday, said: "I'm not the first chairman to change a baseline for different reasons." "The budget Chairman, under [Section] 312, sets the baseline," Graham continued. "This has been acknowledged by Republicans and Democrats." What Happens Next? Debate over President Trump's megabill has now reached the final stages. A "vote-a-rama" on the bill—a marathon session during which lawmakers may introduce amendments to a reconciliation package—kicked off in the Senate on Monday morning. Should the bill pass a Senate vote, expected this week, it will then be sent back down to the House for approval. On Friday, Trump said that his preferred deadline of July 4 was not the "end all," but later said via Truth Social that the House of Representatives "must be ready" to send the bill to his desk by this date.
CNBC
18 minutes ago
- CNBC
BlackRock's Rick Rieder says there is a 'generational opportunity' for income right now
The high levels of income in the bond market right now are a "generational opportunity" for investors, according to BlackRock's Rick Rieder. "I've waited for two decades of my life for some deals," he said in an interview with CNBC, pointing to the years of low interest rates that ended in 2022. Bond yields move inversely to prices. That income is a priority now that bond duration is still no longer the reliable hedge it once was, explained Rieder, the firm's chief investment officer of global fixed income. In other words, fixed income hasn't necessarily offered a ballast against a drop in stock prices. "In a sense, the ability to deliver consistently high coupons to global portfolios can serve as something of a bulwark against equity market drawdowns, especially at a time when duration itself has failed to serve its traditional function," he wrote in the firm's mid-year outlook released Monday. Getting that income doesn't necessarily mean taking excess risk since companies have de-levered, paying down their debt during the post-Covid period, he added. However, the opportunity isn't going to last forever, Rieder told CNBC. He said he anticipates a boost in productivity and innovation from the "greatest technology revolution" that is now underway. That will bring down inflation and, eventually, interest rates, he added. Still, some labor softness could hit the economy in the near term, Rieder noted. Yet, he expects a pretty good second half of the year from a growth perspective — although more toward the last quarter. "A lot of corporate CEOs are sitting and waiting to see what would happen with regard to tariffs, and I think you unlock some of the spend in the capex [capital expenditures] and [research and development]," he said. President Donald Trump 's pause on reciprocal tariffs ends on July 8 and the deadline for a deal between the United States and Europe is on July 9. However, the president recently said he may not adhere to the deadlines, saying, " We can do whatever we want ." Where the opportunities lie The front and the belly of the curve remain the most attractive, said Rieder, who is also the portfolio manager of iShares Flexible Income Active ETF (BINC) . The exchange-traded fund has a 30-day SEC yield of 5.45% and a 0.40% net expense ratio. BINC YTD mountain iShares Flexible Income Active ETF year to date Rieder still favors European credit and peripheral sovereign bonds, like Spain and Italy. The yields are terrific and there isn't much concern about supply, he said. "If you're a dollar investor — and this is something that we also haven't seen in decades — we get a cross-currency swap benefit," Rieder said. "Everybody's trying to hedge their U.S. dollar exposure. Being a dollar investor you actually get the benefit and it's tremendous," he added. "We get an extra 2%, 2.5% benefit for being a lender in Europe and that makes all the difference in the world for a dollar investor." He also likes securitized products in the United States. They make up 35% of BINC's assets, with commercial mortgage-backed securities and non-agency MBS accounting for some of that allocation. Rieder has reduced BINC's allocation to investment-grade bonds, which now make up 7% of the ETF. Instead, he said he'd rather get the income from high-yield bonds or agency MBS, the latter of which has attractive income and is much more liquid than corporate bonds. Biggest risk in the market The biggest risk facing fixed-income investors right now is the rising federal deficit, Rieder said. Concerns about it have fueled volatility in the market, he said The U.S. budget deficit hit $316 billion for the month of May, according to the Treasury Department. "There is the risk we still have to keep doing these [Treasury] auctions," he said. "Long-end interest rates are extremely volatile and sensitive to inflation." While Rieder thinks inflation is coming down, he isn't sure that will happen in the next few months. "Longer term, I think we'll be able to outrun the debt," he said. Near term, "markets tend to sense vulnerability." "I watch every 10-year, 20- or 30-year auction," he added. "In the bond market, to me, it's almost a sigh of relief when they get them done."
CNBC
23 minutes ago
- CNBC
Watch CNBC's full discussion with J.P. Morgan's Meera Pandit and Neuberger Berman's Shannon Saccoica
Meera Pandit, J.P. Morgan Asset Management global market strategist, and Shannon Saccocia, Neuberger Berman chief investment officer of wealth, join CNBC's 'Closing Bell' to discuss market outlooks.
