Jeremy Siegel, Wharton School at the University of Pennsylvania finance professor, discusses his views on the markets and economy.
Talk of inflation has been swirling for some time amid all the stimulus that's been pouring into the market and the soaring debt levels in the U.S. The Federal Reserve has said that any inflation that does occur will be temporary, but one hedge fund macro trader says there are plenty of reasons not to Read More
Why Stocks Will Be Best Performing Asset For 3-5 Years: Wharton’s Jeremy Siegel
It is the best performing asset. And I think it's going to be the best performing asset. If we look out three to five years I just think there are challenges that we face now. If you remember I was on your show early January I said this year was going to be zero to 10. I was the biggest bear in this group of roundtable. I still think it's going to be there. I think rising interest rates are are going to be a challenge. I think corporate profit projections for 2019 are too high. You know we had a great year this year and Friday we can get GDP. I think it's going to look good. I think it's going to be in the upper threes but people I look at now fourth quarter in the twos maybe three next year. How do we get 12 13 percent profit. Increases. You know out of a 2 to 3 percent GDP and I think that those interest rate profit challenges are going to be key stock prices mutator for this coming year.
If you remember you were on September 25th on Squawk Box and you said I'm expecting a correction. Near term similar to the one we saw in February that was a good call on September 25th so you know sometimes I've heard people like joke around that you're a permeable but you actually said interest rates and trade worries could cause a 10 15 percent correction. And you said that in September but then in 2019. You're not. Jeremy Siegel that you have been for 2019 either are you. I mean you're looking for kind of a flattish year.
Yeah I'm not I'm I'm looking I'm looking flattish Of course you know we've got resolutions we've got the midterm elections we got the interest rates we've got trade with China. I mean certainly the midterms and what's going to happen to China. You know something's going to happen the next three months will happen on that front. How is the Fed really going to engineer a soft landing. You know when you look at charts of unemployment spiking down there's not many soft landings so there's going to be a wobble at best. And with rising interest rate that that you know that presents the thing as we aware in him I really want to move into stocks now. You know we've talked about the fact that so often emerging markets has I think presented unbelievable values. I will admit that I've been catching the falling knife and my fingers are bloodied ear. But wow. I mean you know what is it 10 11 P E ratio there. So I think looking international even though I know how it's done. May offer you more value looking forward than the U.S. in the near term until we see some of these resolutions.