Ed Yardeni thinks the S&P could reach 10,000 by 2030. Albert Edwards reckons it at — I don’t know — 10, maybe.

I’m just kidding on that latter part, although only barely. I remind readers about this fairly often, and I imagine Albert gets a kick out of it (or maybe not by now) but for the longest time, Edwards seriously entertained the idea that the S&P might revisit the March 2009 lows, known to business television fans older than, say, 35, as the “Haines bottom.”

Suffice to say the world’s risk asset benchmark par excellence never made it back down to 666, and as Albert conceded on Thursday, Yardeni “has proved a lot more right on the equity market than I have.” As ever, Edwards was gracious, describing himself as “a fan” of Yardeni who’s an “inspiration” for his “beautifully drawn charts.”

Ed’s obviously a bull and Edwards is obviously a bear. In fact, Albert’s the bear. True to form, he sees problems right now with stocks. Specifically, he sees a worrying juxtaposition between persistently elevated bond yields and US equities trading historically rich.

The figure above makes the point: We’re out on a shaky limb with the index trading on a 21.5x forward multiple and 10s one bad session away from 4.50% (and probably one ratings agency warning away from making a run at cycle-highs north of 5%).

Note that Albert circled the 2018 experience. Who remembers 2018? Jerome Powell, not new at the Fed, but new in the big seat, committed a pretty egregious communications error in early October of that fateful year, when he described Fed funds as “a long way from neutral.” That, combined with tariff angst, tipped the dominoes on what would go down as one of the more severe non-recessionary equity drawdowns in living memory. It wasn’t quite a bear market, per se, but the S&P kissed a 20% drop in the harrowing sessions ahead of Christmas 2018.

“US P/Es have continued to push higher in the wake of the presidential election,” Edwards wrote Thursday, on the way to recalling 2018, when stocks “shrugged off rising bond yields — until they didn’t.” Eventually, he went on, rising yields “will just as surely begin to hurt equities” in 2024 or 2025.

It’s hard to argue with that, with one caveat: When it comes to rising bond yields and equities, what matters in the near-term is the rapidity of rate-rise, not any specific level. Stocks can countenance rising yields as long as they’re rising for the “right” reasons (e.g., growth optimism) and, more importantly, as long as they don’t rise too fast. A truly rapid increase in bond yields — Goldman generally puts it at two standard deviations in any rolling 30-day period — will weigh on stocks. Period.

The figures below, also from Edwards’s Thursday missive, show the ratio of the index’s forward-to-trailing multiple on the left, and a truly eye-watering valuation disparity between the US and Europe on the right.

“High profits justify high P/Es, or so I am told, but expectations have now run far ahead of trailing EPS reality,” Albert wrote. “But as with all bubbly episodes I have witnessed during my 42 years in the industry, there is always a seemingly plausible and compelling narrative to explain away investor exuberance.”

I actually don’t think Edwards needs the customary allusion to a generic “What could go wrong?” rhetorical bear narrative here. If the ratio illustrated on the left is elevated and trailing profits aren’t depressed (e.g., because we’re exiting a recession or, say, a plague), then you’re staring at great expectations, so to speak. Whether those expectations count as irrational exuberance is typically only known in hindsight, but that ratio is at least a yellow light even if it’s not a red flag.

Of course, if you have to choose between Yardeni’s 10,000 SPX by 2030 and Albert’s 10 by next week (that’s humor, but you get the idea), you have to go with Ed over Edwards, because stocks do rise over time.

And yet, as Albert pointed out Thursday, the disclaimer actually warns against assuming that. “Isn’t it precisely at times like this that investors would do well to remember the fine print of financial disclaimers that state ‘Past Performance is Not Indicative of Future Results'”? he wondered.

To Albert I’d say this: Don’t give up. Because the way things are headed both geopolitically and on the climate front, SPX 10 might actually make more sense than SPX 10,000 for 2030.