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The Nasdaq from late 1998 to early 2000 was up more than 200%. Now we are up almost 100%, and we may be on the same track. Everything I look at indicates a melt-up. ‘
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That’s Edward Yardeni, president of Yardeni Research, who in a recent CNBC interview is cautious about where the stock market is coming from. The relentless rally in cryptocurrency, he explained, is just one of the signs of potential weakness.
“It’s just part of the bull market in everything,” Yardeni explained. “It is very important whether or not you are in bitcoin BTCUSD,
to just stare at the map and realize that when it goes straight up, it is certainly a sign of exuberance, of speculative excess. ”
As for a timeline of when things could get worse, Yardeni, a longtime Wall Street strategist, said the broader market rally should take a while.
“The blue wave is likely to remain bullish for the first half of this year,” he said. ‘We are getting more government spending. We will show the Federal Reserve much of that government spending through quantitative easing. I think interest rates will remain pretty low. ”
But that could soon change as the US economy begins to recover from the pandemic. “In the second half of the year,” said Yardeni, “we can look forward to consumer price inflation that would not account for overvalued assets.”
Watch the interview:
No signs of a Sunday night melt-up, with futures on the Dow Jones Industrial Average YM00,
S&P 500 ES00,
and technically demanding Nasdaq Composite NQ00,
all of which point to a slow start to the week.