“`html
Ed Yardeni Warns of Potential Market Pullback
Economist Ed Yardeni has cautioned that the S&P 500 may drop by 5% from its recent high through December 2023, highlighting that the index is currently trading 13% above its 200-day moving average. Yardeni’s remarks, reported by Bloomberg on Monday, suggest that the market rally may have become overextended as it has rebounded by roughly $17 trillion since 2022.
Furthermore, data from JPMorgan indicates that AI-related stocks have been a major contributor to this rally, accounting for 75% of S&P 500 returns and 90% of capital spending growth since 2022. However, recent trends show that hedge funds and institutional investors are selling tech stocks at the fastest pace since July 2023, a concerning sign for market stability as the Nasdaq has corrected by nearly 2% due to reduced exposure to high-valuation tech.
“`
