Jeremy Siegel, finance professor at the University of Pennsylvania's Wharton School, says since the earnings recession has ended, President-elect Donald Trump is setting the stage for stocks to continue their bull run.
“I think the corporate tax reform and lowering the (corporate tax) rate is the most important thing that's driving the market," he told CNBC.
“I think also the prospect of lowering regulation a bit on the prospect of repatriation of those foreign funds. I think all those work positively. And I don't think all that effect has yet been put in," he said.
On top of that, “we are out of the earnings recession. It definitely looks like we are coming out,” he said.
“Now, there is a wild card. We all worry, 'Is Trump going to go on to a trade war?, a currency war?' And all of that is kind of in the back of my mind. He hasn't moved in that position yet. And if he doesn't move in that position, I definitely think we have more upside," Siegel said.
He isn't alone in his bullish sentiment about the market.
Newsmax Finance Insider Andrew Packer agrees. "Stocks are still the best game in town for investors as we head into a new year. But they’re still pricey as well," he wrote in his weekly blog. "The S&P 500 trades close to 24 times earnings. The only two times stocks have been more expensive on average, we were entering the housing bubble 10 years ago and the Internet bubble 20 years ago," he wrote.
"The funny thing is, stocks could go a lot higher. Between high amounts of cash on the sidelines by wary investors and a lack of mania, we’re not at the psychological point where the trend is likely to break. And even, then, alternatives to stocks didn’t fare too well either," Packer said.
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