After a gruelling March, market may reassert bullish stance; Jeremy Siegel lists 4 steps for recovery
Siegel shot into limelight after he forecasted that the Dow Jones would reach 20,000 at the end of 2015. The index ended that year at 17,425.
March 31, 2020 / 08:55 AM IST
Jeremy Siegel, a professor of finance at the University of Pennsylvania’s Wharton School of Business, on March 30 said that the worst may be over for the stock markets.
In an interview with CNBC, Siegel said that the stock market may have bottomed out last week and listed four steps to determine the staying power of this current run-up in stocks.
The US stock market logged some nifty gains on March 30 with the Dow Jones Industrial Average settling 690 points higher at 22,327 up 3.2 percent. The index has ended in the green in 3 out of the last four sessions but is still down over 12 percent in March.Siegel's 4 step guide to ensure bona fide stock-market recovery
- Fiscal and monetary stimulus
- Flattening the curve
- Vaccines and therapeutics
- Deadlines for economic normalcy
The first step has already been achieved, the professor said.
US President Donald Trump on March 27 signed a $2.28 trillion stimulus package to aid businesses and workers threatened by the spread of COVID-19 that has killed over 3,000 and infected more than 1,60,000 people across the nation.
Siegel feels a lot more needs to be done to achieve steps 2 and 4.
Speaking on reinstating economic normalcy, Siegel said that a lot of uncertainty in the stock market can be removed if a systematic action plan for reopenings portions of the economy comes into play. He added that the country also needs to ramp up testing to effectively contain the contagion.
On Sunday, the Trump administration had extended social-distancing guidelines to April 30 from April 12, suggesting that POTUS may finally be taking the threat imposed by the novel coronavirus, which has claimed over 37,000 lives worldwide, seriously.