Jeremy Siegel: Emerging Market Mess Won't Upset US Stocks

Monday, 27 Jan 2014 01:55 PM

By Dan Weil

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The emerging market turmoil that pushed U.S. stocks down last week is unlikely to have a lasting impact, says stock market guru Jeremy Siegel, professor of finance at the University of Pennsylvania's Wharton School.

Emerging market stocks and currencies dropped early Monday, but the carnage eased after Turkey's central bank announced a special interest rate meeting for Tuesday, which lifted the lira higher.

As for U.S. stocks, Siegel says he's not a perma-bull. "There have been times I felt we were way overpriced," he told CNBC. But for now, "I still think we're slightly under fair market value."

Editor’s Note:
Retire 10 Years Earlier With These 4 Stocks

Siegel has said recently that fair value is 18,000 to 18,500 for the Dow Jones Industrial Average. The Dow stood at 15,824 early Monday afternoon.

"I think what happened last week, for those of us with some gray hair, remember the Asian [currency] crisis of '97, people are beginning to say, oh, my God, is this the beginning of something that looked like that? That really shocked the market."

But Siegel doesn't believe it's as bad now. "I don't think Argentina and Turkey are anything like Korea, Thailand, Indonesia back 15 years ago," he noted. "But those memories, I think, are what caused anxiety in the market."

Others express optimism about U.S. stocks too. "The market is volatile and it just feels like a lot of scared buyers are out there," Sandy Villere, a fund manager at Villere & Co., told Bloomberg.

"We don't see a major pullback. Earnings are largely pretty good and the U.S. is generally healthy."

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

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