• Home
  • Breaking News
  • Privacy Policy
  • Email Whitelisting
No Result
View All Result
Money Profit News
No Result
View All Result
Home Breaking News

Market is ‘one more bad inflation report’ away from a correction, Wharton’s Jeremy Siegel warns

by
November 21, 2021
in Breaking News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

Related Posts

Insiders Pour Millions Into These 2 Beaten-Down Stocks, Analysts Say They Could Be Ready to Bounce Back — Here’s Why You Should Pay Attention

Arby’s employee found dead in freezer had ‘beat her hands bloody’ trying to escape, lawsuit says

Markets are sounding alarms on China’s economy, but analysts say Wall Street is missing the big picture

3 reasons why even China doesn’t want the yuan to replace the dollar as the world’s reserve currency

Long-term market bull Jeremy Siegel expects a serious pullback that it isn’t tied to the Covid-19 surge risks.

His tipping point: a drastic change in Federal Reserve policy in order to deal with hot inflation.

“If the Fed suddenly gets tougher, I’m not sure that the market is going to be ready for a U-turn that [chair] Jerome Powell may take if we have one more bad inflation report,” the Wharton finance professor told CNBC’s “Trading Nation” on Friday. “A correction will come.”

The consumer price index surged 6.2% in October, the Labor Department reported earlier this month. It marked the biggest gain in more than 30 years.

Siegel criticizes the Fed for being far behind the curve in terms of taking anti-inflationary action.

“Generally, since the Fed has not made any aggressive move at all, the money is still flowing into the market,” Siegel said. “The Fed is still doing quantitative easing.”

He speculates the moment of truth will happen at the Fed’s Dec. 14 to Dec. 15 policy meeting.

If it signals a more aggressive approach to contain rising prices, Siegel warns a correction could strike.

Despite his concern, Siegel is in stocks.

“I am still pretty fully invested because, you know, there is no alternative,” he said. “Bonds are getting, in my opinion, worse and worse. Cash is disappearing at the rate of inflation which is over 6%, and I think is going higher.”

Siegel anticipates rising prices will stretch out over several years, with cumulative inflation reaching 20% to 25%.

“Even with a little bit of bumpiness in stocks, you have to be wanting to hold real assets in this scenario. And, stocks are real assets.” he noted. “All that which in the long run is going to maintain value.”

But it depends on the company.

He notes the inflation backdrop would create headwinds for tech high-flyers in the Nasdaq, which is at record highs and crossed 16,000 for the first time ever on Friday.

“If interest rates go up, the very high-priced stocks which discounts cash flows way into the future… [are] going to be affected because of the discounting mechanism,” he added.

Siegel attributes growth stocks’ record strength to Delta variant fears and falling Treasury yields. He predicts the Covid-19 surge will subside as more people get boosters.

“That has stopped the so-called reopening trade,” he said. “Value has gotten very cheap.”

If Siegel is right about an abrupt Fed policy change, he sees Wall Street getting over the shock of it fairly quickly and a new desire to own dividend stocks and financials in 2022.

“[Financials] have been selling off recently with the lower interest rates,” Siegel said. “They could come back.”

Disclaimer

Next Post

Maxing Out Your 401(k) and What to Do Next

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:

By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

Popular Posts

Breaking News

Insiders Pour Millions Into These 2 Beaten-Down Stocks, Analysts Say They Could Be Ready to Bounce Back — Here’s Why You Should Pay Attention

by
May 30, 2023
0

Read more

Insiders Pour Millions Into These 2 Beaten-Down Stocks, Analysts Say They Could Be Ready to Bounce Back — Here’s Why You Should Pay Attention

Arby’s employee found dead in freezer had ‘beat her hands bloody’ trying to escape, lawsuit says

Markets are sounding alarms on China’s economy, but analysts say Wall Street is missing the big picture

3 reasons why even China doesn’t want the yuan to replace the dollar as the world’s reserve currency

The AI Boom Runs on Chips, but It Can’t Get Enough

Nvidia is not the only firm cashing in on the AI gold rush

Load More

All rights reserved by www.moneyprofitnews.com

  • Home
  • Breaking News
  • Privacy Policy
  • Email Whitelisting
No Result
View All Result
  • Email Whitelisting
  • Home
  • Privacy Policy

moneyprofitnews