Future market surprises will be on the upside, says Wharton's Jeremy Siegel
WILL RALLY LET’S BRING IN JEREMY SIEGEL WHARTON SCHOOL OF BUSINESS PROFESSOR. JUST A SECOND HERE, PROFESSOR, THE HEAD FACTKES THAT WE’RE SEEN WITH THE MARKET RIGHT NOW. WHAT IS THE MARKET TRYING TO PREVENT? TRYING TO PREVENT PEOPLE FROM GETTING LONG OR TRYING TO PREVENT PEOPLE FROM SELECTLING >> JOE, I THINK BEARISHNESS AND EVERYBODY WHO IS OUT OF THE MARKET IS OUT AND EVERYBODY WHO IS TACTICAL IS SHORT THEREFORE, THE SURPRISES ARE ON THE UPSIDE THE DOW IS COMING DOWN THAT IS VERY GOOD NEWS POTENTIAL GOOD NEWS IN DEVELOPMENTS IN UKRAINE, ALTHOUGH IT DOES INDICATE MORE
UNCERTAINTY. LOOKS LIKE WE’RE GOING TO HAVE A DECENT PRINT ON THE CPI. THAT, NOTWITHSTANDING, I DO THINK THE FED HAS DECIDED BARRING SOME EXTREME NEWS, WE ARE GOING 75 THIS TIME MORE IMPORTANTLY, WE’RE GOING TO END UP AT THE END OF THE YEAR AND THE MARKET THINKS ANOTHER 150 FROM WHERE WE ARE TODAY. THAT’S 75 AND I GUESS 50 AND THEN ANOTHER 25 IN THE DECEMBER MEETING. I THINK THAT SHOULD DEFINITELY DO IT BECAUSE ON THE GROUND, I DON’T SEE PRICES GOING UP ANYWHERE NEAR CERTAINLY THE RATE IT DID WITH THE IMPORTANT HOUSING PRICES WHICH
ARE GOING DOWN WE WILL NOT SEE THOSE AS I NOTED BEFORE IN THE OFFICIAL STATS >> RIGHT IF YOU READ THAT BOOK FROM WHENEVER IT WAS IN
A RESUMPTION OF THE DOWN TREND TO 3,000 3,000 FOR THE S&P OR IS IT TRYING TO SHAKE OUT PEOPLE THAT DON’T REALLY BELIEVE WE’RE STARTING A NEW UP TREND. THAT IS WHAT I THINK IT WAS. I THINK IT WAS TRYING TO SHAKE YOUR FAITH IN THE JULY RALLY THAT IT WOULD BE LONG LASTING. I DON’T THINK IT IS A MOVE TO THE NEW LOW. >> I SAID I THOUGHT THE JUNE LOWS ARE THE LOWS. YOU ALWAYS HAVE A BASING PERIOD. IT GOES UP AND DOWN AND, YEAH, THAT REINFORCES THE BEARISHNESS. AS YOU SAID, A HEAD
FAKE AGAIN, WE HAVE SEEN THOSE SENTIMENT INDICATORS BECOME SO NEGATIVE REALLY, WHEN I LOOK AT THINGS ON THE GROUND IN TERMS OF EARNINGS, YOU KNOW, PEOPLE TALK ABOUT A RECESSION. WE ALREADY HAD TWO NEGATIVE QUARTERS OF GDP WITH COLLAPSING PRODUCTIVITY WE GET ANY REBOUND IN PRODUCTIVITY IN THE SECOND HALF OF THE YEAR, THAT IS FURTHER DOWNWARD PRESSURE ON PRICES WHICH MEANS THE FED DOESN’T HAVE TO GO TO AN EXTREME. I THINK, AGAIN, WHEN EVERYONE IS SOLD, THE ONLY PLACE — ONLY THE BUYERS ARE LEFT AND THE SHORTS ARE EXPOSED. WE WILL CERTAINLY SEE WHAT HAPPENS
IN ON THE GROUND DEVELOPMENTS I THINK THE MARKET IS LIKING THE ECB BEING MORE AGGRESSIVE MEANS THE DOW CAN GO DOWN. IT REALLY HAS GONE DOWN. THAT IS IMPORTANT IN TERMS OF THE FOREIGN EARNINGS DEVELOPMENTS IN UKRAINE ARE MOVING QUICKLY THIS MAY MEAN A SETTLEMENT MOVING FORWARD MAYBE EUROPE PREPARED BETTER THAN WE FEARED FOR THE WINTER. YOU KNOW, JOE, THE THING IS WE HAVE MILLIONS OF PIECES OF NEWS. WHEN THE MARKET GOES DOWN, WE TAKE FROM THE PILE THAT IS FROM THE NEGATIVE WHEN THE MARKET GOES UP, WE TAKE FROM THE PILE THAT IS POSITIVE
THE SENTIMENT AND SO MANY PEOPLE SAID THIS IS JUST ANOTHER HEAD FAKE BEAR MARKET RALLY TELLS ME HISTORY, THE LOWEST SENTIMENT IS MARKET BOTTOM JUST AS THE HIGHEST BULL
