If a U.S.-China trade deal is off the table, stay away from the stock market, says Jeremy Siegel, Wharton School professor of finance.
The Dow Jones Industrial Average lost more than 250 points after President Donald Trump indicated he might wait until 2020 to strike a trade deal with China. The White House reportedly still plans on moving ahead with scheduled Dec. 15 tariffs on Chinese goods despite the recent efforts between the two countries to work up phase one of a trade agreement.
“Yields are going to stay really low with Treasuries being a hedge asset like this … Utilities and defensive stocks, anything that gets you yield I think is going to do pretty well in 2020,” Siegel said.
However, Siegel cautioned Trump’s downplaying the urgency to make a deal could be a negotiating tactic.
“Honestly, in my personal opinion, this is just a negotiating tactic — be really tough right before you make a deal. I still think he will make a deal this year,” he said.