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Jeremy Siegel: Dow 24K Will Be Easy, but Dow 25K 'a Little Tougher'

Jeremy Siegel (Matt Rourke/AP)

By    |   Wednesday, 01 Nov 2017 09:00 AM

Economic guru Jeremy Siegel predicts the Dow Jones industrials will certainly top 24,000 by year’s end.

However, the next milestone may be tougher to achieve, the Wharton School finance professor said.

"I think we're going to get to 24,000," the long-time bull told CNBC.

"I have almost never seen a week with this many Earth-shattering economic events," Siegel said.

A jump in shares of consumer companies Mondelez and Kellogg after their quarterly reports on Tuesday, along with further gains for tech stocks, helped Wall Street end October on a positive note, Reuters reported. The three major indexes tallied their best monthly gains since February.

The Dow Jones Industrial Average rose 28.5 points, or 0.12 percent, to 23,377.24, the S&P 500 gained 2.43 points, or 0.09 percent, to 2,575.26 and the Nasdaq Composite added 28.71 points, or 0.43 percent, to 6,727.67.

Investors are also awaiting an announcement on the next Federal Reserve chair, which could come this week. President Donald Trump is likely to pick Fed Governor Jerome Powell, who is seen as more dovish on interest rates and thus relatively stock market friendly, sources have told Reuters.

The Fed started its two-day meeting in Washington on Tuesday, although the central bank is widely expected to leave interest rates unchanged in its statement on Wednesday.

Market-watchers are also tracking developments of the tax-cut plan being developed by Trump and fellow Republicans.

"We are going to see the tax cut. That's going to be very important," Siegel said.

Siegel argues that tax reform isn't completely priced into the market because it's been mostly speculation.

"I think half of it is going to be corporate taxes. And if it looks like they've [the Trump administration] got those Republicans on board, I think we've got another push in the stock market," said Siegel.

However, he sees the next Dow milestone being a bit harder to achieve.

"The next thousand is going to be a little tougher to 25. We have a lot of gains that I think will be digested," Siegel said.

Other experts don't see an end to the market's current bull run.

“You look at the earnings out of these big players and they continue to impress,” said Steve Chiavarone, portfolio manager with Federated Investors in New York. “It strikes me that that leads you to a much more bullish outlook for the fourth quarter.”

“The macro data is getting better, the market is prepared for Jerome Powell, the market is also prepared for Friday’s payrolls. I also think the market is ready for what the (Fed) says tomorrow,” said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.

“I don’t think there is anything out there that could derail the market from a point of view it doesn’t already expect.”

Third-quarter earnings in general have come in modestly above expectations. With more than half the S&P 500 components reported, earnings are estimated to have climbed 7 percent in the quarter, up from an expectation of 5.9 percent growth at the start of October, according to Thomson Reuters I/B/E/S.

“We continue to see better-than-expected economic numbers and corporate earnings,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois. “I think fundamentally investors are really focused on those numbers more than the political noise, if you will, in the background.”

(Newsmax wire services the Associated Press, Bloomberg and Reuters contributed to this report).

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Economic guru Jeremy Siegel predicts the Dow Jones industrials will certainly top 24,000 by year's end. However, the next milestone may be tougher to achieve, the Wharton School finance professor said.
jeremy siegel, dow, stock, market, investors, landmark
Wednesday, 01 Nov 2017 09:00 AM
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