Despite the continued strength of the US economy, market veteran Ed Yardeni predicts a potential 10% correction in the stock market. Yardeni notes that strong retail sales in March and an updated first-quarter GDP growth estimate of 2.8% indicate a robust economy.
Yardeni cautions that the stock market could fall 10% and test its 200-day moving average around 4,700 in the next few months. Rising bond yields and declining stock prices, with the S&P 500 falling below its 50-day moving average, suggest a possible correction.
Despite these concerns, Yardeni believes that consumers are still driving economic growth due to rising disposable income, a comfortable retirement for many Americans, and an influx of immigrants contributing to the economy.
In conclusion, Yardeni suggests that although the stock market may face a correction, the US economy continues to show strength. Real disposable income is on the rise, leading to increased consumer spending and overall economic growth. Despite market volatility, the economic outlook remains positive.