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Jeremy Siegel: Stocks Could Jump 15 Percent This Year if Earnings Rebound

Jeremy Siegel: Stocks Could Jump 15 Percent This Year if Earnings Rebound

By    |   Thursday, 07 July 2016 09:04 AM

Wharton professor of finance Jeremy Siegel predicts that the stock market could surge the rest of the year if corporate earnings rise 10 percent.

"If we get a good second half of the year earnings-wise, then I think the market could be up 10 to 15 percent," Siegel recently told CNBC.

With energy earnings set to rise and the global macroeconomic environment stabilizing, he says earnings may be ready to rise by 10 to 12 percent, CNBC reported.

"Given the low interest rates, the market does not look expensive" — particularly with "all the central banks acting very, very dovish," he said.

With the 10-year Treasury yield hitting record lows, "there's really no hope for yield in the fixed income market," which should drive investors to stocks, Siegel said.

"We need an earnings rebound to really get the stock market going."

But not all experts are as optimistic as Siegel, a longtime noted market bull.

For example, Seattle-based Russell Investments says American equities are priced too high with too few prospects for earnings growth to rally much more. Other reasons for caution listed in a recent report include weaker job creation and fading price momentum. The firm reiterated an underweight recommendation for U.S. stocks.

“We see the new mediocre, which is a combination of lackluster global GDP growth, weak corporate earnings and expensive U.S. equity market valuations,” Paul Eitelman, investment strategist for North America, told Bloomberg. “The net result of that is that we think medium-term expectations are likely to be subdued.”
(Newsmax wire services contributed to this report).

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With a rebound in the energy sector, investors could see some upside, the Wharton finance professor says
jeremy siegel, stocks, earnings, energy
Thursday, 07 July 2016 09:04 AM
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