One Wharton School professor, Jeremy Siegel, has high hopes for the future of the Dow Jones Industrial Average, according to CNBC. Siegel theorizes that the DJIA might rise as much as 10 percent or more in 2014. However, before the new year even begins, he believes things might substantially improve — quoting a possible 6 percent rise in the Dow by the end of 2013, and this added to the 25 percent gain year to date already seen in the blue-chip index.
“November and December are usually pretty good months. There’s no major uncertainties that are hanging over the market, at least in these two months coming up,” said Siegel. He also expects gross domestic product to rise to 3 percent to 3.5 percent from this year’s 2 percent, creating a “good climate for earnings growth,” which would help the market cope with a fair amount of tapering from the Federal Reserve. “Don’t forget,” said Siegel to CNBC, “The first rate hike is not expected — right now if you look at the futures market — until April or May of 2015.”
All this positivity isn’t crushed by Congressional fighting either, and Siegel expresses doubts that a second government shutdown or default scare will take place. “I think they are going to kick the [budget] can down the road a whole year. So that’ll be off our plate and that will be a very, very positive factor [for] first quarter 2014,” said Siegel.
Senator Mitch McConnell (R-Ky) seconded that sentiment, stating not long ago that, “There will not be another government shutdown. You can count on that,” according to USA TODAY. Others, like Senator Ted Cruz (R-Tex.) don’t seem as certain that the fight, and subsequent federal standstill, is over.
“I think it was unfortunate that you saw multiple members of the Senate Republicans going on television attacking House conservatives, attacking the effort to defund ObamaCare, saying it cannot win, it’s a fool’s errand, we will lose, this must fail. That is a recipe for losing the fight, and it’s a shame,” said Cruz.
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