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Tags: jeremy siegel | correction | bull | stock market

Jeremy Siegel: Correction Will Stop Raging Bull Market

(Matt Rourke/AP)

Friday, 02 February 2018 09:09 AM EST

Economic guru Jeremy Siegel is warning that the seemingly endless bull-run stock-market rally is about to stall dead in its tracks.

The Wharton School finance professor also is sticking to his call for lower returns in the stock market this year.

He predicts the S&P 500 will return 0 to 10 percent in 2018.

"We haven't had a correction in a long time and when you have a lot of momentum players, that's what you eventually get at the end," he told CNBC.

"It might run to 15 [percent], down to 5 [percent]," he said in an interview with "Power Lunch" on Thursday.

A "correction" is commonly defined as a temporary drop of at least 10 percent adjust for an overvaluation.

However, “Siegel said that doesn't mean he's bearish. He just thinks the market won't be up as much as it was 2017, when the S&P saw gains of 19.4 percent — the best since 2013,” CNBC explained

"We're going to end up with a 10-year twice the [S&P] dividend and we haven't been that way in a decade. I think it's going to get people saying I don't have to rush into stocks the way I did before," Siegel said.

"That's what's going to put the pause on the market because it's certainly not going to be earnings. Earnings are going to come out great this year."

Solid U.S. jobs data on Friday did little to improve the mood in global stock markets as investors continued to worry about rising U.S. bond yields.

However, other economic experts are much more optimistic about the nation's economic future.

The U.S. economy was growing when President Donald Trump took office — but it is "the new spirit of enterprise and optimism" sparked by his policies that keeps fueling the rise, economic policy analyst Stephen Moore said Wednesday.

Moore, who served as the Trump campaign’s economic adviser, told Newsmax TV's "Newsmax Now," it is "hard to find any statistic that isn't headed in the right direction."

"Every week that goes by and the economy continues to do well, that argument that 'it's the Obama economy' starts to flatten out with people," he added.

"This is a president who is pro-business," Moore said, while President Barack Obama "was a president who for the most part was anti-business. And certainly the people he put in positions of power all had a philosophy that was hostile to business."

"There's just this new spirit of enterprise and optimism," Moore said. "You see it everywhere."

For his part, Trump touted the economy's strength and his administration's accomplishments on Twitter. "Our economy is better than it has been in many decades. Businesses are coming back to America like never before. Chrysler, as an example, is leaving Mexico and coming back to the USA. Unemployment is nearing record lows. We are on the right track!" Trump recently tweeted.

(Newsmax wire services contributed to this report).

© 2024 Newsmax Finance. All rights reserved.


InvestingAnalysis
Economic guru Jeremy Siegel is warning that the seemingly endless bull-run stock-market rally is about to stall dead in its tracks.
jeremy siegel, correction, bull, stock market
537
2018-09-02
Friday, 02 February 2018 09:09 AM
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