Ideas
Prefer S&P 493 over MAG7.
Ed prefers the S&P 500 ex-MAG7 Impressive 493 because productivity benefits are already showing up beyond the largest technology names. MAG7 companies now compete with each other, face margin pressure, and may not capture all the benefits of their AI capex, while users and consumers benefit.
MAG7 face competition and margin pressure.
The MAG7 are no longer independent fortresses; AI has turned them into direct competitors. They are spending enormous capex without assured returns, so margins are likely to be pressured and benefits may flow to consumers and users rather than sustaining the group's prior dominance.
Cut tech and communication services weight.
Ed had been overweight information technology and communication services, but these two sectors now account for about 45 percent of S&P 500 market cap, too large relative to their economic importance. He reduced them to market weight to manage concentration risk.
Financials remain a preferred overweight.
Ed continues to overweight financials because many financial companies are effectively technology companies, investing heavily in AI, blockchain, and fintech. Stablecoin adoption could also reshape payments, making financials a reasonable choice in the Roaring 2020s.
Industrials remain an overweight.
Ed remains overweight industrials, especially mid-cap industrials. Data-center investment, onshoring, and demand for industrial equipment should support the sector, making it a real-economy and AI-infrastructure capex play.
Small banks benefit from M&A.
Within financials, Ed especially favors small and mid-sized banks and financial institutions that have lagged. He expects M&A to become more active and sees them benefiting from fintech, AI, and stablecoin adoption.
GE Aerospace is AI picks-and-shovels.
Ed highlights GE Aerospace as a winner in the industrial complex because it provides picks-and-shovels exposure to the AI boom and benefits from aerospace and AI-infrastructure demand.
Upgrade healthcare/biotech on pharma M&A.
Ed is moving healthcare from underweight to overweight, especially biotech. Large pharmaceutical companies need to replenish product pipelines and are active acquirers, which makes healthcare and biotech reasonable investment areas.
Upgrade healthcare/biotech on pharma M&A.
For biotech, Ed says ETFs are the practical vehicle because individual companies have too many company-specific variables. Long-running biotech ETFs have deep liquidity, and after a weak stretch they have performed strongly this year; he expects the trend to continue.
Consumer staples remain underweight.
Ed keeps consumer staples underweight as part of his sector allocation. The transcript does not provide a detailed supporting argument, but the stance is explicit.
Utilities overpriced on AI power demand.
Ed is underweight utilities because the AI-driven electricity-demand narrative has pushed valuations beyond intrinsic value. In his view, too much optimism is already priced in.
Gold targets 5,000, then 10,000.
Ed has been bullish on gold since it broke 2,000 dollars per ounce, recommended buying it, and projected 4,000 dollars when it reached 3,000 dollars. With inflation still above target while the Fed cuts and with gold useful for diversifying an S&P 500 portfolio, he sees 5,000 dollars next year and 10,000 dollars by the end of the 2020s.
Silver, platinum, copper remain positive.
Ed says silver and platinum have performed even better than gold and he maintains a positive view on metals including copper, supported by the broader metals trend and concerns about Fed credibility on inflation.
Small/mid-cap earnings structurally stagnant.
Ed sees a structural problem in small and mid-cap stocks: index earnings have been flat since 2022 while S&P 500 earnings hit records. Large companies use huge cash piles to acquire the most promising small companies before they can scale, leaving many uninspiring names and frustrating small-cap managers.
Watch quantum computing ETFs, but beware startups.
Ed sees quantum computing as likely to become important, with a realistic 5 to 10 year horizon, and notes ETFs exist. He warns pure-play ETFs may be too concentrated in small startups that could be acquired or displaced when IBM, Google, or other large firms commercialize the technology.
Buy EM ex-China via EMXC.
Ed recommends emerging markets excluding China via EMXC as a global alternative. Unlike Japan and Europe, which have already rallied, EM ex-China offers demographic growth, a rising middle class, durable-goods demand, financial-sector development, and exposure to India, Brazil, Mexico, and Indonesia while avoiding China's state-controlled economy.
Avoid China equities.
Ed avoids China investments because the government still makes many decisions, the economy is not entrepreneur-led or competitive, property remains in a collapsed bubble, and negative wealth effects weigh on consumers. He sees China mostly as a volatile trading vehicle, not a core investment.
China healthcare worth watching.
If investing in China at all, Ed points out that healthcare has been the best-performing sector this year rather than technology, which makes sense because of China's rapidly aging population. He treats it as a monitoring or trading idea, not a core investment.
Prefer gold over bitcoin.
Ed is not a bitcoin bull. Stablecoins, now legitimized by the GENIUS Act and pegged to the dollar, are taking bitcoin's money and payment function, while bitcoin has no clear economic valuation and is only a highly volatile store of value. If choosing between bitcoin and gold, he chooses gold.
S&P 500 can reach 10,000.
Ed expects the S&P 500 to reach 10,000 by the end of the 2020s under his Roaring 2020s scenario. The drivers are AI and digital-revolution-led productivity, a resilient baby-boomer consumer, strong technology capex, and stimulative fiscal deficits, with no normal recession expected.
Active funds may beat passive funds.
Ed argues active funds may outperform passive funds from here because passive portfolios are locked into market-cap concentration while the MAG7 and technology leaders face more competition. Active managers can diversify away from overconcentrated positions.
This 3PRO TV (삼프로TV) video, published January 03, 2026,
features Ed Yardeni
discussing S&P 500 ex-MAG7 (Impressive 493), MAG7, XLK, XLC, XLF, XLI, KRE, GE, XLV, XBI, XLP, XLU, GLD, SILVER, PPLT, COPPER, VXF, QTUM, EMXC, FXI, KURE, BTC, SPY, Active U.S. equity funds.
21 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Ed Yardeni
· Tickers:
S&P 500 ex-MAG7 (Impressive 493),
MAG7,
XLK,
XLC,
XLF,
XLI,
KRE,
GE,
XLV,
XBI,
XLP,
XLU,
GLD,
SILVER,
PPLT,
COPPER,
VXF,
QTUM,
EMXC,
FXI,
KURE,
BTC,
SPY,
Active U.S. equity funds
