Jeremy Siegel, professor at the University of Pennsylvania's Wharton School, has curbed his well-known enthusiasm for the stock market.
"Although a number of firms have beat their third-quarter estimates, guidance has not been overenthusiastic.... We have the election to go through. You have the Fed hike to go through," he told CNBC.
"It's going to be harder to make headway," he said.
Siegel, who has had a 2,300 year-end price target on the S&P 500 for much of the year, now predicts the index will close between 2,250 and 2,300.
"You need bang-up earnings and super guidance to get over the hump of a rising 10-year.... That's the competition," said Siegel, who believes the next interest rate hike will happen in December. "People are coming to the conclusion, 'Yeah, the Fed is going to hike,' and then the question is, 'How much are they going to hike in 2017.' That's the anxiety that's putting pressure on these stock prices," he said.
Siegel stresses that the stock market is still the best place for investors to be, and he's by no means a “bear” right now.
"The Fed is raising [rates] because they think the economy is sounder and we're going to get faster growth," said Siegel. "I think we're going to get an over 3 percent GDP reading for the third quarter, which would be the biggest quarterly rise in two years," he said.
"You know, we could have a nice year-end rally that could bring us to my original prediction rather than to the range — I hope we do," Siegel said. "But, these challenges are going to be facing the market and they're going to keep it pretty range-bound I think over the next few weeks."
The tumultuous presidential race between Democrat Hillary Clinton and Republican Donald Trump has appeared to tighten in the past week after news that the FBI was investigating more emails as part of a probe into Clinton's use of a private email system.
Meanwhile, HSBC Holdings Plc predicted there's one certain winner of next week's presidential election: investors in gold.
Although they deem a Donald Trump victory more supportive for the price of the metal than a win by Hillary Clinton, the bank's Chief Precious Metals Analyst James Steel told Bloomberg it'll enjoy at least a 8 percent jump whoever wins the race.
If the real-estate magnate triumphs, gold could rise to $1,500 an ounce, according to HSBC, up from around $1,289 Tuesday in New York.
"There is concern over Trump being unexpected, because the market has really priced in a Clinton win and it hasn’t priced in a Trump win at all," Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York, told Reuters.
In addition, the Federal Reserve is holding its two-day policy meeting, with its statement due on Wednesday. While traders do not expect the central bank to raise interest rates just a week ahead of the presidential election, they are looking for signs confirming that the Fed is set to hike rates in December.
"It’s really hitting the dividend-yielding names harder than anything else...," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco. "I don’t know if there is a new 'taper tantrum' sort of building here on concerns the Fed will act in December and the whole low interest rate environment is about to change."
(Newsmax wire services contributed to this report).
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