Wharton School finance professor Jeremy Siegel said the fate of the stock market depends on China.
"If we could get resolution with China, this market could pop 10 percent," Siegel told CNBC.
But he said implementation of the $200 billion worth of additional tariffs that President Donald Trump has threatened could result in a "20 percent drop" in stocks.
Siegel also doesn’t think economic growth will be as strong as some of the most optimistic estimates.
"I don't think we're in a 4 percent economy. I do think it looks like we ratcheted it up to a 3 [percent] economy," Siegel said. "That is a big improvement over the 2.25 [percent] we had before."
Siegel downplayed the importance of the currency crisis in Turkey, saying it won't lead to contagion and probably won't be talked about much in six months.
China and the United States will hold lower-level trade talks this month, the two governments said on Thursday, offering hope that they might resolve an escalating tariff war that threatens to engulf all trade between the world’s two largest economies, Reuters reported.
Still, White House Economic adviser Larry Kudlow warned Beijing not to underestimate President Donald Trump’s resolve in pushing for changes in China’s economic policies.
A Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet U.S. representatives led by Treasury Under Secretary for International Affairs David Malpass, China’s Ministry of Commerce said in a statement on its website.
The Wall Street Journal reported that the talks in Washington would take place on Aug. 21 and 22, just before $16 billion in new U.S. tariffs on Chinese goods take effect, along with an equal amount of retaliatory tariffs from Beijing.
(Newsmax wire services contributed to this report).
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