Stock-market bull Jeremy Siegel predicts the Dow Jones industrials would spike 1,000 points if President Donald Trump suddenly resigned.
The scandal over Trump's firing of Federal Bureau of Investigation Director James Comey hit Wall Street hard on Wednesday.
The S&P 500 and the Dow notched their biggest one-day fall since Sept. 9 as investor hopes for tax cuts and other pro-business policies faded, Reuters reported. The Dow fell more than 370 points, while the S&P 500 dropped 1.8 percent. The Nasdaq shed 2.6 percent.
Siegel told CNBC that he believes Wall Street would prefer a President Michael Pence rather than Trump, with the firm belief that tax reform will eventually be accomplished.
In addition, he thinks the recent market rally right after Election Day has been fueled by the Republican agenda, not the Trump agenda.
"If Donald Trump resigned tomorrow I think the Dow would go up 1,000 points," the Wharton School finance professor said in an interview Wednesday with "Closing Bell."
Siegel sees the sell-off as a buying opportunity and thinks tax reform will still get done no matter what happens with Trump.
"The Republicans have a lock. Nothing can change that for two years," Siegel argued.
And he believes Trump will sign whatever tax or regulatory reform the GOP presents.
"Trump will more likely, if he stays in power, be really controlled by Congress."
However on Wall Street, investors were shelving rosy hopes for U.S. tax reform and rethinking strategies premised on Trump's economic growth promises, Reuters reported.
The uncertainty about Trump's future increased in the last 24 hours over allegations Trump had sought to end Comey's investigation into ties between the president's first national security adviser, Michael Flynn, and Russia, and even some Republicans were now calling for a deeper probe into possible obstruction of justice, Reuters reported.
From stocks to bonds to the U.S. dollar, a bevy of trades that have been fashionable since Trump's election last November, were getting dialed back or in some cases shredded as his reform agenda looked increasingly vulnerable amid the fallout from his firing last week of Comey.
The result was the harshest sell off yet in U.S. stocks since Trump was elected and a jettisoning of positions that were tied to the notion that his policies would stoke economic growth and inflation.
"The Trump Trade is over as of today," Ross Gerber, co-founder and CEO of Gerber Kawasaki Wealth and Investment Management, who said they have been selling for the past 45 days and continued to be bearish on risky assets today. "We've seen cracks all year, but today, this is the first institutional selling we are seeing."
Indeed, some "Trump trades" have been unwinding for weeks, especially in the bond and currency markets where bets on inflation risks and economic growth prospects are most prevalent.
"This has created opportunities for investors," said Richard Benson, managing director, co-head of portfolio investments, Millennium Global Investments, London, who said they had been short U.S. dollars against European currencies. "And right now, we're looking at these opportunities."
(Newsmax wires services contributed to this report).
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