Markets

Jeremy Siegel: Dow 'without question' would be above 30,000 if not for coronavirus uncertainty

Key Points
  • Longtime stock bull Jeremy Siegel said the market is trading at 20 times his estimates for this year's earnings.
  • "That is not unreasonable" but also "certainly not cheap," he explained.
  • "When people forget about valuations, the market could get too high," the Wharton Finance professor said. But he stressed, "We're not there yet."
Suddenly anything can happen in the market, says Wharton's Jeremy Siegel
VIDEO5:3305:33
Suddenly anything can happen in the market, says Wharton's Jeremy Siegel

Longtime stock bull Jeremy Siegel told CNBC on Thursday the Dow Jones Industrial Average would easily crack 30,000 if it weren't for the market uncertainty around the coronavirus outbreak.

"If there is good news on this virus front, we would pop above 30,000 I think without question," said the Wharton Finance professor, as stocks fell on Thursday.

The Dow, in early trading, was giving back a chunk of Wednesday's 275-point advance. But it was still less than 2% away from 30,000. The Dow closed at a record of 29,551 on Wednesday.

Siegel said investors should pay attention to valuations in order to stay grounded. He said the market is trading at 20 times his estimates for this year's earnings.

"That is not unreasonable," considering the low interest rate environment, he said. "But it's certainly not cheap."

"When people forget about valuations, the market could get too high," he said. But he stressed, "We're not there yet."

Siegel worries about "momentum players," which had gotten the year off to a roaring start on Wall Street before the mid-January to early February stumble.

The new coronavirus, called COVID-19 — which was discovered on Dec. 31 in the city of Wuhan, China in Hubei province — started to get widely publicized late last month. The vast majority of cases and deaths are in China.

The virus "interrupted" the market surge, he said, predicting about a total return for stocks of about 5% this year after 2019's banner year.