Joining us right now is Ed Yardeni. He is the president of Yardi Research. And Ed, you say you have been humming a tune ever since we got those cooler thanex expected inflation numbers on Friday.You want to hum a few bars for us now. >> Well, you know, I mean, there there are a lot of songs here. Happy days are here again certainly comes to mind.And Fly Me to the Moon, you know, that great Frank Sinatra song comes to mind. Um, so, uh, there there's a lot of happy songs. Don't worry, Be Happy might be anothe ...

Market Outlook & Earnings - The market's current rally is partly fueled by expectations of a Federal Reserve rate cut, potentially around 50 basis points [1][3][4] - Q1 and Q2 earnings have exceeded expectations, driving the market to new highs [2] - The market is counting on earnings continuing to make new highs [2] - Technology and communication services account for 40% of the S&P 500 market capitalization and 28% of earnings [7] - Analyst consensus expectations show small caps are showing signs of life [11] Valuation & Potential - The valuation multiple is around 22, which is considered acceptable [3] - A potential "melt-up" scenario could see the price-to-earnings ratio rise to 25, reminiscent of 1999 [5] - If the Fed surprises with a 50 basis point cut, the S&P target could be revised upwards to 7,000 [4][5] - The "impressive 493" (companies outside the Magnificent Seven) also had good earnings and are expected to contribute to market growth [8][9] Risks & Uncertainties - A debt crisis scare, potentially triggered by the government having to refund $500 billion to $1 trillion due to overturned tariffs, could derail a year-end rally [15]

And where are stocks heading from here. Well, we welcome Ed Yardi to Power Lunch. He is founder and head of Ardeni Research.Ed, great to have you on. >> Thank you very much. >> All right.Why do you think the market is not reacting a little more negatively to the hot inflation read and a lowered expectation of more Fed rate cuts in the future. Well, I think the uh market hasn't given up on the idea that the economy is actually resilient, that it doesn't necessarily need lower interest rates and that if we ge ...