Professor of Finance at Wharton School, Jeremy Siegel, said Tuesday that market strength is now within 5%. Inflation has been replaced by company earnings reports as the major driver of market weakness. “The market was at its lowest point in the first three and a half months, or four months, of 2012,” said Jeremy Siegel, Wharton School finance professor. [market]The rise in interest rates was the reason for decline. It is the weakness that I have been calling the numerator. That is, earnings. In the stock price, earnings is more important than the interest rate.” Siegel stated to CNBC’s “Closing Bell” The stock market has seen a rise since the beginning of this year. [ Federal Reserve ]”There is now concern over those earnings for the first-time.” “I believe that we remain within 5% of what was predicted.” [market] bottom. “I still believe earnings will come in well,” said he. The tech-heavy Nasdaq and broad-based S & P 500 both fell on Tuesday while the Dow Jones Industrial average saw a slight gain. After Snap CEO Evan Spiegel made a grim assessment of the company’s earnings and revenue this quarter, tech stocks were the worst affected. Nordstrom however beat Wall Street expectations on its revenue, and it raised its full-year outlook in its most recent quarterly report. The stock rose 11% afterwards. Analysts are looking out for signs that there is a market correction, and this could be a sign the stock will ease. Wall Street’s VIX, which is a fear gauge that goes over 40, is one of the most commonly used indicators. Siegel stated that he does not believe this is a reliable indicator. It doesn’t mean you have to possess it, he stated. You almost always have it. You don’t need it to be able to call the bottom in the stock market.
