In May and June we hosted well-known Wall Street strategist Ed Yardeni in multiple Canadian cities for fireside chats moderated by Jennifer Mersereau and Pat Sommerville, Co-CEOs of Hamilton ETFs.

Here are some key takeaways:

The Roaring 2020s Theory

• Proud “perma-bull” Ed Yardeni says there’s an 80% probability that the economy and stock market will continue to have a strong decade just as they did in the 1920s. He has a S&P 500 target of 8,250 by the end of year and 10,000 by the end of the decade. “Roaring 2030s” is not out of the question either.
• He highlighted the parallels between the two decades — both began with pessimistic outlooks, pandemics and recessions. Just as it is now, technology was used back then to boost productivity, which he called “fairy dust” since it “makes everything better” like growth, inflation, profit margins, wages relative to prices etc.
• While the 1920s ended in the Great Depression, Yardeni believes a similar outcome will be avoided this time and pointed to the Smoot-Hawley Tariff Act of 1930 as the differentiator. According to him, that was the main contributor to the severe economic downturn a century ago.

Reasons for his bullishness

• Yardeni believes what’s driving markets is strong earnings expectations. He says the rally we’re seeing can be attributed to “FEMO” (Fabulous Earnings Momentum) not “FOMO” (Fear of Missing Out) since the latter tends to inflate forward P/E and we’re not seeing that currently.
• He is confident consumer and capital spending will remain strong and argued the economy has been “stress tested” and proven resilient.
• He believes baby boomers, the richest retiring generation in history with a collective net worth of $89 trillion, will support the younger generations’ spending. To illustrate his point, he used a chart (see below) that shows real disposable income per household going flat while consumer spending reaches new highs.
• Capital spending is being driven by AI, the latest stage in the digital revolution. The processing, analyzing and storing of data, which he says there will be an endless supply of, will require significant investments in data centers and equipment. He also dismissed fears of this capital spending being unsustainable, which certain investors have voiced, and he sees companies in the future having their own in-house LLMs (Large Language Model), which should “dramatically cut costs.”

Quote: “You can see that the actual level of capital spending is straight up. It’s up, up, and away. And some people get very nervous about that … But I like movies, and sometimes I have analogies to movies. And I just think that Buzz Lightyear got it right. Buzz Lightyear said to infinity and beyond.”

What could go wrong?

• Yardeni sees a few potential risks, including major geopolitical events like China invading Taiwan or an oil shock that raises the price to $150 or $200 USD a barrel. He was especially unsettled by executives at Exxon and Chevron recently warning of falling inventories.
• A credit crunch would also be problematic. He’s been keeping an eye on credit ETFs, bank lending and credit spreads and doesn’t see any cause for concern, but “maybe there is something going on in the private credit system that’s going to come back and bite us. I don’t think so.”
• The SpaceX IPO could cause lots of volatility if the price spike that Wall Street is “rigging” triggers profit-taking. (Yardeni believes the public debut is being “managed” by Wall Street to be a success.)
• The market may receive a nasty shock if the Fed raises interest rates in July instead of late this year as expected.

Quote: “My sense of economic history, especially over the past 50 years in the U.S., is that it’s credit crunches that are the killers. That’s what causes recessions, that’s what causes bear markets. And so that’s kind of what we have to watch out for.”

Ignore the political noise

• Yardeni said most financial news is about decisions being made in Washington, but the U.S. economy has performed well despite changes in policy and investors shouldn’t “let politics get in the way of making money.”
• He also said geopolitical crises have historically been buying opportunities, and many know it now, which is why investors bought on the dip at the end of March.

Sector opportunities and going global

• Yardeni and his team recommend “market-weighting” the Information Technology and Communication Services sectors and being “overweight” on Financials, Industrials, and Health Care. They are “not so keen” on Consumer Staples because “you’re paying a high PE for a low growth rate” as in the case of Walmart and Costco.
• Yardeni continues to recommend “Go Global,” citing relatively cheaper opportunities overseas, and he thinks international equities are poised to outperform if the war ends.
• The “Go Global” recommendation is a broaden-out recommendation, not a sell-America recommendation.

Quote: “Look if the price of oil keeps coming down because the war gets settled, then the rest of the world should outperform the U.S., because the U.S. hasn’t been as damaged or at risk with oil prices being where they are today because we’re actually significant oil exporters.”

Gold

• Yardeni sees gold as a really good diversifier for stocks thanks to the inverse correlation with equities, which means your “upside in stocks is sometimes offset by some downside in gold, but the [long-term] trend is about the same.”
• He believes that if markets keep rising, people will rebalance into gold and the price will reach $10,000 USD per ounce by the end of the decade.
• He acknowledged Hamilton ETFs has a buy-and-hold asset allocation ETF combining U.S. stocks (60%), U.S. treasuries (20%) and Gold (20%), the Hamilton Enhanced Mixed Asset Allocation ETF (MIX).

The national debt

• Yardeni thinks of the rising national debt as stealing from future generations and says the high deficits (nearing $2 trillion this year) are one of the reasons the economy is resilient. He says after 9/11 politicians realized running deficits, either to fund spending or provide tax cuts, is a good way of winning votes. But the government will “get away with it” until the “bond vigilantes” start selling and yields spike.
• He also said the sustained demand for U.S. debt reflects the enormous amount of global wealth that needs to be invested. He noted that foreign investors continued buying U.S. equities and fixed income even during periods when the “dump America” narrative was popular. He doesn’t believe the doom and gloom stories about the U.S. dollar since they haven’t panned out.

Quote: “I invented the term bond vigilantes back in 1983, and the idea is if fiscal and monetary policy don’t maintain law and order, if the sheriff doesn’t do it, the bond vigilantes will do it.”

Fed policy

• Yardeni predicts the Fed will pivot from an easing bias to a tightening bias at the June meeting and hike rates by 25-basis-points in July. This is much sooner than the market is expecting.
• He thinks the Fed was created to establish financial stability and will be under pressure to raise rates to protect its credibility as “things are getting a little bit unstable.”

Quote: “I think we got rational exuberance that could quickly become irrational exuberance, which is another reason why I think the Fed will raise and should raise in July just to calm things down. I mean, I would have been happy getting to 7,700 [S&P 500 index level] by year end, but you know, here we are talking about 8,250. You know, I’d like to get to 10,000 by the end of the decade. I don’t want to get there by the end of the year. So, you know, I don’t want a meltdown situation.”

Trivia

Question: Poland, Kazakhstan, Brazil, China and Turkey were the biggest central bank buyers of gold in 2025, but one fintech company bought more than all of them[1]. What is it called?

Answer: Tether Holdings Limited, the world’s largest stablecoin issuer. Stablecoins are digital tokens backed by and pegged to a specific asset. Tether maintains gold reserves to back its tokens, and this example represents how digital assets may support higher gold prices in the future.

 

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[1] From “The international role of the Euro, June 2026,” European Central Bank

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