Ed Yardeni sees S&P 500 reaching 7,700 next year, says profits and growth will 'remain resilient'

Core Viewpoint - The "Roaring 2020s" is expected to continue, with the S&P 500 projected to reach 7,700 by the end of next year according to strategist Ed Yardeni [1] Economic Outlook - Yardeni raises the odds of a continued "Roaring 2020s" scenario from 50% to 60% for 2026, while reducing the likelihood of extreme market scenarios (meltup or meltdown) from 30% to 20% [2] - Economic growth is anticipated to accelerate in 2026, driven by various factors including tax benefits, monetary stimulus from a Fed rate cut, and significant capital expenditures in the tech sector [4] Earnings Projections - S&P 500 companies' collective earnings per share are expected to rise from $268 this year to $310 next year, marking a 15.67% increase [3] - In the third quarter, S&P 500 companies reported a 13.4% year-over-year earnings growth [3] Sector Analysis - Yardeni has ended his 15-year Overweight recommendation for tech stocks and Communication Services sectors, indicating these sectors are already heavily weighted in the S&P 500 [5] - The combined weight of the Technology and Communication Services sectors accounts for approximately 45% of the S&P 500 [6] - The forward earnings share of these sectors has reached a record 38.6% of the S&P 500's forward earnings, but the riskiness of an S&P 500 portfolio has increased due to concentration in these sectors [7]