Jeremy Siegel on Stocks: This Is a Correction, Not a Bear Market

Wharton finance professor Jeremy Siegel says the drop in U.S. stock markets that began last Friday is a temporary correction, largely in response to events in China and unusually large, downward revisions in U.S. corporate earnings expectations. But while the correction so far has hovered around 10%, he warns that such downward movement often generates a rebound, which is already is underway, followed by a further drop. In this Knowledge@Wharton interview, Siegel says he thinks the Dow ultimately could drop 15% from recent highs before recovering to around 19,000 by year-end. What’s happening now is a correction — not the beginning of a bear market — which would be a drop of around 20% or more, he notes.