Perma-Bull Yardeni: Stock Rally Driven by Earnings — Not FOMO but "FEMO"
Taylor Wilson
Yardeni Research president Ed Yardeni calls this rally FEMO — Fabulous Earnings Momentum — not FOMO, arguing that sustained earnings beats, not sentiment, are driving stocks higher and that the run has room to extend as long as estimates keep rising.
FEMO vs. FOMO — what's the real difference?
Yardeni coined FEMO — Fabulous Earnings Momentum — to distinguish this bull market from a sentiment-driven FOMO rally.
This means → he sees the advance built on companies beating estimates quarter after quarter, not on investors chasing prices higher.
In plain terms = FOMO is "everyone's making money, I'd better jump in." FEMO is "companies are actually earning more — the stock price follows." The second is sturdier.
A 21× P/E — is that expensive?
The S&P 500 trades at roughly 21× earnings; Yardeni says that is not obviously stretched.
Wall Street analysts forecast S&P 500 component earnings will grow a cumulative ~20% over the next seven quarters.
This means → if those earnings materialize, the multiple effectively shrinks on its own — even if the index stays flat, the P/E falls as the "E" rises.
Why hasn't the consumer cracked?
Even when gasoline hit $4–5 per gallon, aggregate U.S. consumer spending kept growing.
Yardeni attributes the resilience partly to Baby Boomer wealth — retirees and near-retirees hold roughly $89 trillion in net assets.
In plain terms = America's wealthiest generation still has deep reserves. High inflation and high rates hit, but the cushion is thick enough to keep overall spending from collapsing.
What does the 2022 bear market tell us in hindsight?
The Fed hiked from near zero to 5.5%, triggering the 2022 bear market — yet the economy achieved a soft landing (a slowdown without recession).
Yardeni now calls that bear market "a very good buying opportunity."
This reflects his core conviction: the earnings-growth thesis was never broken by rate hikes — the drawdown was a repricing, not a structural break.
What signal does SpaceX's record IPO send?
SpaceX recently completed the largest IPO in U.S. capital-market history, raising $75 billion.
Yardeni reads it as proof of market health — ample liquidity and strong risk appetite.
This means → when a mega-IPO clears smoothly and the market absorbs it, the funding side shows no sign of tightening.
S&P 10,000 — what has to go right?
Yardeni stands by his "Roaring 2020s" thesis, first proposed in August 2020, and projects the S&P 500 could reach 10,000 by end-2029.
His logic boils down to one line: "As long as earnings estimates keep getting revised up, this rally still has room to run."
The next seven quarters of actual earnings delivery are the critical checkpoint for that call.
Content is for reference only, not financial advice.