Dow Passed 20,000: What’s Next?

Global Chief Investment Officer
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Last week our Behind the Market’s podcast had a great guest to discuss the big news of the week: the Dow Jones Industrial Average passed the 20,000 mark for the first time. Both Wharton Professor Jeremy Siegel, our co-host, and Tobias M. Levkovich, Chief U.S. Equity Strategist for Citi Research, weighed in on the prospects for equity gains in 2017.

U.S. Markets Bull vs. Bull:

Professor Siegel had the more bullish bias in terms of potential gains—but he also had a bigger caveat and hesitation based on fears of global trade rhetoric from Trump.  
I pushed Professor Siegel on whether trade wars could really be a problem—or whether there are some really important issues Trump might be focused on that have some common-sense appeal and will turn out OK. 
Levkovich was bullish on the market and has a model that assigns a fairly high probability of good market gains this year. But his model points to more modest gains, perhaps around 10% total returns for 2017. 
Cyclical bias: Levkovich also has a cyclical bias in terms of where he allocates, and we discussed those sectors he likes.
• We further discussed sentiment for the market, volatility models and the great rotation from bonds to equities that Levkovich believes is going to be a catalyst for the markets

China: Bull vs. Bear

We also had a second guest on the program: Brian Neider of Lead Edge Capital. Neider is a growth equity investor who focuses on private markets in software and Internet companies, with some public company exposure. I saw Jim Chanos at the Evidence-Based Investing conference in New York last year, where he presented a case to be short Alibaba. Neider’s firm has been a major investor in Alibaba over the last five or six years, and they remain bullish. 

I would note: this year China has been a surprising stand-out in performance, as we’ll soon discuss in a blog post, and Alibaba’s earnings beat many expectations last week. For those looking for a review of various types of exposure that go beyond the public markets, Neider does a nice job of outlining the industry and his firm’s place in it. 

Listen to the entire “Behind the Markets” podcast series here.

Important Risks Related to this Article

Investments focused in China increase the impact of events and developments associated with the region, which can adversely affect performance.
For more investing insights, check out our Economic & Market Outlook


About the Contributor
Global Chief Investment Officer
Follow Jeremy Schwartz

Jeremy Schwartz has served as our Global Chief Investment Officer since November 2021 and leads WisdomTree’s investment strategy team in the construction of WisdomTree’s equity Indexes, quantitative active strategies and multi-asset Model Portfolios. Jeremy joined WisdomTree in May 2005 as a Senior Analyst, adding Deputy Director of Research to his responsibilities in February 2007. He served as Director of Research from October 2008 to October 2018 and as Global Head of Research from November 2018 to November 2021. Before joining WisdomTree, he was a head research assistant for Professor Jeremy Siegel and, in 2022, became his co-author on the sixth edition of the book Stocks for the Long Run. Jeremy is also co-author of the Financial Analysts Journal paper “What Happened to the Original Stocks in the S&P 500?” He received his B.S. in economics from The Wharton School of the University of Pennsylvania and hosts the Wharton Business Radio program Behind the Markets on SiriusXM 132. Jeremy is a member of the CFA Society of Philadelphia.