[Market Watch] After a brutal stock selloff in December and for the year, markets could be due for a rally in 2019, says Jeremy Siegel, professor of finance at the University of Pennsylvania’s Wharton School of Business.There’s one catch ‐ the U.S. needs to avoid a recession, which some economists and the market are already pricing into expectations for this year.
On top of that, investors may need to wade through a rough first three months of the year to get to rosier times, Siegel told MarketWatch during a phone interview, reiterating comments he made earlier during a CNBC interview on Wednesday.
"My feeling is that the market is virtually positioned for a mild recession, but I just don’t think that it’s going to happen," Siegel said. "If we avoid a recession, we’re going to have a really good market," he told CNBC.
The Wharton professor who forecast that the Dow Jones Industrial Average DJIA, +0.08% would see 20,000 at the end of 2015 says now that a combination of a better-than-expected corporate and economic results should embolden bulls in the near term.
"I think we swung too positive last summer and now I think we’ve swung too negative," he said.
Indeed, last month’s drop for stocks marked the worst December for the Dow and S&P 500 SPX, +0.13% since 1931 and the worst annual return for the three main equity benchmarks, including the Nasdaq Composite Index COMP, +0.46% since the financial crisis of 2008, according to Dow Jones Market Data.