Edward Yardeni, president of Yardeni Research, said he has a case of "FEMO," referring to fabulous earnings momentum.
This outlook suggests that corporate profitability is providing a critical cushion for the U.S. economy, potentially offsetting fears of a broader downturn. By emphasizing earnings strength, Yardeni signals that the fundamental drivers of the stock market remain intact despite wider macroeconomic volatility.
Speaking on Bloomberg Money, a program on Bloomberg Television, Yardeni said, "I have a case of 'FEMO,' or fabulous earnings momentum." He said that recent earnings reports demonstrate a level of strength that supports continued economic resilience [1, 2].
This optimism persists despite ongoing debates regarding the timing of a potential economic contraction. According to Yardeni Research, the probability of a U.S. recession in 2026 is 19% [3]. This figure indicates a relatively low expectation of a downturn compared to more pessimistic forecasts.
Yardeni said that his previous outlook may have been too cautious. He said, "I haven't been bullish enough on the stock market" [4]. This admission suggests a shift toward a more aggressive positive stance as corporate data continues to exceed expectations.
The focus on earnings momentum serves as a counter-narrative to concerns about inflation or interest rate pressures. By centering his thesis on the actual performance of companies, Yardeni said that the ability of businesses to generate profit is the primary indicator of economic health, a metric that currently remains strong [1, 2].
“I have a case of "FEMO," or fabulous earnings momentum.”
Yardeni's 'FEMO' thesis shifts the focus from macroeconomic headwinds to microeconomic success. By assigning a 19% probability to a 2026 recession, he is positioning the U.S. economy as significantly more resilient than historical patterns or cautious analysts might suggest, implying that corporate earnings can decouple from broader economic instability.
