Jeremy Siegel: Why I'm feeling much better about stocks

Dow's bumpy ride to 20,000: Jeremy Siegel

Despite four-straight down trading days, longtime stock bull Jeremy Siegel said Friday he feels more relaxed about the prospects for stocks than he did two weeks ago.

The last time the Wharton school finance professor was on CNBC's "Squawk Box," a week before the Federal Reserve's mid-March meeting, he said stocks may be in for a correction by summer if the central bank moves to raise interest rates.

But now, he's more comfortable with the Fed's more tempered stance on rates. "I think the Fed gets it; mostly gets it. I thought they were being way too aggressive in their projections of interest rates. And they have come down on that."

Many economists believe the first move from near-zero percent could be in September or October. The last time the Fed increased rates was in 2006.

Atlanta Fed President Dennis Lockhart, a centrist, told CNBC on Thursday he would increase interest rates midyear or even later, because the economy is throwing off "mixed signals."

Rounding up a busy week of Fed-speak, central bank Chief Janet Yellen is scheduled to deliver a speech in San Francisco right before the stock market closes this afternoon.

Siegel has been calling for 20,000 as fair value for the Dow Jones industrial average. If all goes well, he predicted, that level could be reached by year end.

But he cautioned near term of a "choppy market," with range-bound trading on the Dow of 17,000 to 18,500.

On Thursday, the Dow closed at 17,678. The blue-chip average and the were slightly lower for the year before the open Friday.

Meanwhile, the dollar—which has risen more than 20 percent in the past year—remains a big drag on corporate earnings, and the move has been "tantamount to a Fed tightening of maybe up to 50 basis points," Siegel said.

"Four to 5 percent would be the slowest growth of earnings that we had since the Great Recession," he added.

As for stocks outside the U.S., he said, "Europe is looking more attractive because of the euro risk has been taken out mostly from that trade," as market watchers wonder if the single currency will drop to parity with the dollar.

The euro zone economy will benefit from the European Central Bank's massive bond-buying program, he added, but argued that long-term fiscal reforms there are also needed.