Given the market’s rocky ride last week, skepticism is understood. Jeremy Siegel nonetheless still sees the Dow at 17,000 by year’s end.
“It’s going to be choppy over the next five or six weeks,” the famed Wharton professor told CNBC on Friday. “I mean, we know rates are going to move higher. Now, what we hoped was when rates moved higher, we’re going to get a stronger economy, so we’re going to get some earnings boosts. That’s what we need.”
The Dow Jones Industrial Average ended its worst two-week period since June on Friday, after falling 225 points on Thursday. Despite investor skittishness, Siegel remained bullish.
“I certainly wouldn’t throw in the towel. I’m still projecting Dow 16,000 to 17,000 by year end,” he said. “I think we could have a very good fourth quarter. But we’re going to have a challenge over the next five to six weeks.”
Siegel cited the rise in the U.S. Treasury yields but saw a robust demand for equities beginning in the fall.
“What happened [Thursday] was the worst possible world,” Siegel said. “We had a strong labor market report with jobless claims, and we know the Fed looks at jobs for the tapering. And of course we have the weak guidance from the retailers.”
“It hurts when it goes up,” he added. “Now we’re going catch 3%, I’m sure, on the 10-year — a little indigestion on the stock market.”
Siegel concluded by claiming, “if we can get some strength in the economy, people will look past that to a much better third and fourth quarter, and that’s when buying starts in stocks.”
Check out Jeremy Siegel Sees ‘Really Great’ Opportunities in Emerging Markets on ThinkAdvisor.