Wall Street Bulls to Stampede, Says Siegel
Better look twice if you're about to cross Wall Street. A bull may come stampeding around the corner at any given moment.
Of course we're having a little fun, but according to Wharton Professor Jeremy Siegel, we may as well be serious.
In a live interview of CNBC's Halftime Report the widely followed strategist told us the S&P would likely make new highs this year – in 2013!
"These are the ingredients of a bull market," he insisted.
Siegel sees a number of catalysts, all of which, he thinks will drive a significant rally.
- Rotation Underway: "I think we're looking at the beginning of the great rotation from bonds to stocks. People are thinking I can't stay in these bonds funds anymore."
"In fact, I have never seen stocks cheaper relative to bonds – that's why I think we're going to see rotation – now is the time for stocks," he said.
- Investors Not Spooked by 'Second Cliff': In other words, the Street learned from the fiscal cliff debacle that although politicians may squawk and squabble – ultimately they'll find common ground. "Even those investors who are concerned, once we get through the debt ceiling discussions in spring, I expect to see even more inflows."
- Multiple Expansion: Because interest rates are at an all-time low, Siegel expects investors to grow more willing to accept a greater premium on stocks – because they offer a much better return. "With these low interest rates we could support a 17 or 18 P/E and not be overvalued," he said.
All told, Siegel sees big gains.
"These are the ingredients of a bull market," Siegel insisted. "I fully expect the S&P to gain as much or more as it did last year. – that would put the S&P at an all time high by year's end."