Yardeni: Stocks to move higher

The S&P 500 fell 0.8 percent last week, its second consecutive weekly decline.

The decline in stocks over the past two weeks has mostly been attributed to the escalation of the trade war between the US and China as the former threatened and subsequently implemented increased tariffs on imports from the latter.

However, Edward Yardeni, president of Yardeni Research, sees the stock market resuming its rally before long.

“I think it moves higher partly because there’s a recognition that even companies that do business with China are going to find ways to deal with this escalating trade tension like moving some of their supply chains to other countries,” said Yardeni on CNBC.

Yardeni thinks that the “trade escalation is probably going to be more of a negative for China than it is for the United States”, so the former “desperately need a deal much more so than we do”.

“I think a deal will be struck and probably by the end of this summer, if not before then,” he added.