Wharton finance professor Jeremy Siegel, who’s known for his positive market forecasts, is warning that Wall Street isn’t ready for accelerated tapering. He believes inflation is going to be a bigger issue than Fed officials predicted, and that the market won’t be able to cope. “We all know that a lot of the levity of the equity market is related to the liquidity that the Fed has provided,” he told CNBC. “If that’s going to be taken away faster, that also means that interest rate hikes are going to occur sooner. Both those things are not positives for the equity market.” In other news, gold is on the rebound. Kitco News reports that after dropping $30, the precious metal surged back to its very familiar territory of $1,750-$1,760 an ounce.
CNBC News/Stephanie Landsman
Market is unprepared for the inflation fallout, Wharton’s Jeremy Siegel warns
Wall Street may be on the verge of an uncharacteristically painful quarter.
Wharton finance professor Jeremy Siegel, who’s known for his positive market forecasts, is sounding the alarm on the market’s ability to cope with inflation.
“We’re headed for some trouble ahead,” he told CNBC’s “Trading Nation” on Friday. “Inflation, in general, is going to be a much bigger problem than the Fed believes.”
Siegel warns there are serious risks tied to rising prices.
“There’s going to be pressure on the Fed to accelerate its taper process,’” he said. “I do not believe that the market is prepared for an accelerated taper.”
You can read the full story, here.
CNN Business/Michelle Toh
Evergrande could be about to sell its property management unit in scramble to raise cash
Shares in Evergrande were suspended Monday amid reports that a rival Chinese real estate developer was preparing to buy its property management business — a move that could inject much-needed cash into the ailing conglomerate.
Cailian News, a Chinese state-run financial news outlet, reported Monday that Hopson Development was planning to assume control of Evergrande’s property management arm by buying a stake of about 51% in a deal that could be worth more than 40 billion Hong Kong dollars ($5.1 billion).
Chinese state-run tabloid Global Times also covered the expected deal, referring to various “media reports” the same day.
Shares of Evergrande’s property management business and Hopson were also suspended from trade in Hong Kong on Monday. In a stock exchange filing, the Evergrande subsidiary cited “a possible general offer for the shares of the company,” while Hopson said in its own filing that an announcement was “pending,” and would be related to a major acquisition.
Continue reading, here.
Kitco News/Ann Golubova
Have you given up on gold? Surprising comeback after volatile week
It has been a very volatile week for gold. After dropping $30, the precious metal surged back to its very familiar territory of $1,750-$1,760 an ounce.
Soaring U.S. Treasury yields and a higher U.S. dollar were the main obstacles for gold. And despite avoiding a government shutdown in the U.S. this week, there is still the threat of default as the heated debt ceiling debate continues.
Read the entire story, here.