A Joe Biden presidency and the Republicans holding the Senate is “early Christmas”
for the stock market; and the pros-
pect of distribution of Pfizer’s
COVID- 19 vaccine starting by year’s
end augurs that by mid-2021, “the
virus is totally gone.”
That’s the rosy outlook from
Wharton finance professor Jeremy
Siegel in an interview.
He argues that — after the vaccinereceives emergency approval from theFood and Drug Administration — it andothers undergoing tests by four additional companies, will trigger businessesto reopen next year. And the “enormousliquidity” provided by the FederalReserve and CARES Act will functionlike “kindling wood” to fire up a “tremendous increase in economic activity,”he forecasts.
The University of Pennsylvania secu-
rities expert and senior investment
strategy advisor at WisdomTree wrote
“Stocks for the Long Run” (5th edi-
tion — 2014), which The Washington
Post named “one of the 10 best invest-
ment books of all time.”
In the interview, Siegel offered his
forecast for the economy and stock mar-
ket, the latter to possibly see a correc-
tion in the technology sector.
Siegel was interviewed just after
Biden was declared president-elect.
He was speaking by phone from
Philadelphia. The otherwise upbeat dis-
cussion also was clouded by his fore-
cast for “relatively high” unemployment
next year. To remedy that, he cited a
need for companies to hire workers who
were laid off amid the pandemic and to
Here are highlights of our conversation:
How will President-elect Joe Biden’spresidency impact the stock market?Biden’s winning the presidency andthe Republicans holding the Senateis the best thing possible — an earlyChristmas for the stock market. It’san excellent combination to block thetax increases [Biden proposed]. If theDemocrats do get those two Senateseats in Georgia, [any tax increases]will be muted because conservativeDemocrats won’t go for some of themore extreme measures.
What approach will Biden take in
working with the Senate?
We’re going to go back to an environ-
What about the critical issue of trade —
ment of horse trading … [That is], things
will get done through more tradition-
al ways [again]. Maybe some tax rates
could jump a little higher on the high
end, with a bit of a rise in the corporate
tax rate [too], but it’s going to be a trade
[-off ] type of deal.
regarding China, in particular?
We’ll have a more rational policytoward China — not all those tariffs.I liked Trump’s tax cuts and deregulation; but a lot of his stuff on tradewasn’t good. I don’t think Biden willpursue [that].
What does Pfizer’s COVID- 19 vaccine
mean to the stock market?
Obviously, it’s good for the economy andstock market because it [will] push thereopening of the economy forward —and that’s very positive for economic
By Jane Wollman Rusoff
Jeremy Siegel: Christmas Is Coming
Early for the Stock Market
The Wharton professor gives his predictions for the new political
landscape and economy.