Wharton’s Jeremy Siegel says market is ‘within 5%’ of the bottom

Wharton School finance professor Jeremy Siegel said Tuesday that the market is within 5% of the bottom, as company earnings reports have replaced inflation as the primary driver of market weakness. “The first three-and-a-half, four months of this year, the [market] decline was because of the rise in interest rates. The recent weakness is what I call the numerator, and that is earnings, because in the price of stocks is earnings over interest rates,” Siegel told CNBC’s ” Closing Bell .” “We’ve had that rise from the [ Federal Reserve ], and now there is, for the first time, concern about that earnings.” “I think we’re still within 5% of the [market] bottom. I still think earnings are going to come in well,” he said. The tech-heavy Nasdaq and broad-based S & P 500 both fell on Tuesday while the Dow Jones Industrial average saw a slight gain. Tech stocks led the day’s losses after Snap CEO Evan Spiegel gave a bleak outlook for the company’s revenue and earnings this quarter in a note to employees. In contrast, Nordstrom beat Wall Street estimates on revenue and raised its full year forecast in its latest quarterly report after the close, leading the stock to climb 11% after-hours. Some analysts have been looking for signs of capitulation in the market, which could indicate the sell-off will ease. Among the commonly cited indicators is Wall Street’s fear gauge, the VIX , going over 40. Siegel said he doesn’t believe that’s a sure sign. “You don’t have to have it,” he said. “You usually have it. I mean, one thing about the stock market is I don’t think there’s anything where you have to have something to call the bottom.”