Stock-market guru Jeremy Siegel, professor of finance at the University of Pennsylvania, predicted at the beginning of 2015 that the Dow Jones Industrial Average would hit 20,000 by year-end, and he's sticking with that forecast.
"I think we're in a range-bound market now, maybe 17,000 to 18,500. But I still believe 20,000 is the fair market value of the Dow given interest rates and even prospective interest rates," he tells CNBC
"It's not going to be there in the next month or two. Maybe by the end of the year if things go well. We're in a choppy market [now]."
The Dow stands around 3 percent below its March 2 record of 18,288.60.
"We need to see the dollar stabilize, maybe even sink down a little bit" to boost earnings, giving stocks impetus to rise, Siegel argues. Numerous companies have reported that the dollar's strength — it has risen to multi-year highs against a range of currencies in recent weeks — is biting into their earnings.
"We're not going to get a lot of headway in stocks. But then again, I don't think we're in for a big decline unless something quite surprising happens because interest rates are still so very low."
So where should you put your money?
"I think Europe is looking more attractive because the euro risk has been taken out mostly from that trade," he suggests.
"And I think also we should not ignore emerging markets. They're out of favor because they've been whacked on either side. But their currencies are now reasonably priced."
Meanwhile, Martin Pelletier, a portfolio manager at Canada's TriVest Wealth Counsel, cites several signs that the stock market may be running out of steam.
- "Deceleration in earnings growth. The high U.S. dollar and low oil prices are starting to take their toll on corporate profitability," he writes in the Financial Post. Analysts predict earnings for S&P 500 companies will drop 4.8 percent in the first quarter, after rising 3.7 percent in the fourth quarter. Oil prices have dropped to six-year lows, and the dollar has risen to multi-year highs against a range of currencies in recent weeks.
- "An over-reliance on the Fed. We are now back to the scenario where bad news economically is considered good news, as investors want the U.S. Federal Reserve to keep interest rates at ultra-low levels," Pelletier says. Many experts say the six-year bull market for stocks was built largely on Fed easing. And now the central bank is on its way toward raising rates, perhaps starting in September.
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