“If we get a good second half of the year earnings-wise, then I think the market could be up 10 to 15 percent” predicts well-known Wharton finance professor Jeremy Siegel in a recent interview on CNBC’s “Trading Nation.”
According to CNBC’s account of the interview, Siegel says investor perceptions that the market is over-valued is based on weak earnings due in part to lower oil prices. However, he contends that earnings may be primed to rise by 10 to 12 percent as the global economic environment continues to stabilize, and this could lead to a sizeable rally. In that case, Siegel says, “given the low interest rates, the market does not look expensive.” The release of various second-quarter earnings reports this month should clarify whether or not such a scenario will materialize.
With the 10-year Treasury yield at historic lows, the professor argues “there’s really no hope for yield in the fixed income market.” And this should make stocks more appealing to investors.