If a U.S.-China commerce deal is off the desk, avoid the inventory market, says Jeremy Siegel, Wharton College professor of finance.The Dow Jones I
If a U.S.-China commerce deal is off the desk, avoid the inventory market, says Jeremy Siegel, Wharton College professor of finance.
The Dow Jones Industrial Average misplaced greater than 250 factors after President Donald Trump indicated he may wait till 2020 to strike a commerce cope with China. The White Home reportedly nonetheless plans on shifting forward with scheduled Dec. 15 tariffs on Chinese language items regardless of the current efforts between the 2 nations to work up part one in every of a commerce settlement.
If Trump does not attain a commerce cope with China and “the tariffs get placed on on Dec. 15 … I do not know if I need to be round equities then,” Siegel stated on CNBC’s Closing Bell on Tuesday.
Trump’s feedback sparked a flight to secure property, pushing the yield on benchmark Treasury note to the lowest level since August. With no commerce decision between the world’s two largest economies, charges are sure to stay low and traders will gravitate in the direction of dividend-paying shares, Siegel predicted.
“Yields are going to remain actually low with Treasuries being a hedge asset like this … Utilities and defensive shares, something that will get you yield I feel goes to do fairly properly in 2020,” Siegel stated.
Nevertheless, Siegel cautioned Trump’s downplaying the urgency to make a deal may very well be a negotiating tactic.
“Actually, in my private opinion, that is only a negotiating…