Stocks can rally 105 to 15% in 2023 as investors react more to the prospect of lower interest rates in the second half of 2023 than to a relatively small decline in corporate profits this year, Wharton School of Business professor emeritus Jeremy Siegel said on CNBC's " Squawk Box " Thursday. "As important as earnings are, and they're very important, the discount rate is just as important if not more important," Siegel said.
" There's also a chance that corporate profits don't deteriorate as much as many investors fear in 2023, as companies move to slash costs and boost productivity, Siegel said. "I don't think [the labor market] is going to remain that firm. I think we're going to get a little bit of a reverse of what we had last year. Remember we added 4.5 million jobs and had almost no increase in GDP. That's because of a collapse in productivity.
MelissaLeeCNBC The good professor sees interest rates coming down in the second half of the year. That would be a dramatic change from the past year and certainly would represent a Fed pivot. Hope he is right!
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