- Moderna’s vaccine announcement on Monday made the “light at the end of the tunnel” a little bit brighter as the stock market and economy look poised to gain in 2021, Wharton Professor Jeremy Siegel told Bloomberg.
- The renowned finance professor said he expects stocks to have a “really tough period” for the next two to three months, and then perform stronger than expected in 2021.
- Siegel added that the so-called reopening trade will dominate markets next year as work-from-home stocks are fully priced at present time.
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“Everything points upward.”
That’s according to Wharton Professor of Finance Jeremy Siegel, who told Bloomberg on Monday the economy and stock market will be stronger than expected next year.
The professor said that the “light at the end of the tunnel” got brighter Monday morning after Moderna became the second pharmaceutical company to announce a vaccine that’s over 90% effective in treating the coronavirus.
While Siegel expects a “really tough period” for stocks for the next two to three months, he doubled-down on his view that 2021 will be much more positive for the market.
Prior to the election, Siegel told CNBC the market will gain in 2021 regardless of who is president because of the “tremendous liquidity” from the Fed and stimulus. Siegel added on Monday that pent-up demand will help boost the economy in 2021.
The professor also said that there may be moderate inflation of up to 4%, and that will be good for stocks, particularly international equities which may outperform the US in 2021.
Stocks that hinge on the reopening of the economy will be in focus next year, Siegel said, while tech companies and “work-from-home” stocks like Zoom are fully priced at the moment and unlikely to continue grinding much higher.