Siegel Says Rally Has Legs

The stock market boost fueled by the Trump victory will probably continue through December, says Wharton professor Jeremy Siegel in a recent interview with CNBC.

“When you have all the small stocks, large stocks, even tech stocks—which we know have some challenges—joining with it, I don’t think this is something that ends tomorrow.” At the time of the interview, Siegel predicted that the Dow could reach 20,000 (it now stands at 19,300).

Siegel says that Trump’s plan to reduce the corporate tax rate from 35 percent would bolster S&P company earnings significantly. “Even a reduction to 25 percent,” he says, “would boost S&P 500 earnings by 10 percent.”

Ken Polcari, director at O’Neil Securities and CNBC contributor, agrees. “Overall if [Trump’s] economic policies, if any of it comes out to be true, I think we’re set up for a great rally as we move forward.” Bruderman Brothers CEO Oliver Pursche, however, advises caution and suggests, “Stick with high quality and shorten your duration. The bond market isn’t going to collapse overnight. It’s going to take a long, long time.”

“You certainly want to be careful,” he says, adding, “The herd mentality can change very, very quickly.”