Jeremy Siegel says Wall Street will boom in the coming year ‘no matter who is president’

The stock market saw volatility at different levels since March this year. Analysts are optimistic that the stock market will most likely stabilize in the week ahead of the presidential elections and September’s job report.

The presidential election will be the market focus in the coming week as the first debate is between President Donald Trump and former vice president Joe Biden on Tuesday night.

While there are mixed reactions on Wall Street over the coming elections, Wharton School professor Jeremy Siegel believes the stock market will still thrive next year, regardless of who becomes president. He told CNBC that there were many reasons that indicate the markets will not suffer in the coming year, including the increased supply of money due to the COVID-19 stimulus efforts to keep the economy standing.

“I think the chances are this bull market can continue in the next year, just on those factors,” Siegel said. “I think the market… is looking forward to a really good 2021 no matter who is president.”

Siegel said Monday that he is positive in the stock market’s ability to sharply recover from its coronavirus lows, as there are more fundamental factors at play. He cited the Federal Reserve and Congress’ move of pumping trillions of dollars into the economy through coronavirus relief and stimulus packages.

“I’m a monetary theorist. This is what I teach and study. This is unprecedented in 75 years, since World War II,” Siegel said. “I think there’s a lot of repressed liquidity in the market that once the vaccine and the pandemic fears fade in 2021, we’re going to see a big boost in activity.”

As the whole of the United States anticipates the forthcoming Presidential debate, Wall Street increasingly continues to watch and observe changes that are likely to occur, especially to businesses and investments.

Former vice president to Barrack Obama, Joe Biden has proposed to raise the corporate tax rate to 28% from 21%. The tax rate had previously been 35% until the Trump-backed GOP tax law of 2017 made it 21%. Also, Biden wants to increase the tax rate on long-term capital gains.

President Trump reportedly suggested that the proposed tax increase by Biden could be detrimental to the stock market, saying that it would “drop down to nothing” if the new tax law was implemented. Some of Biden’s supporters on Wall Street have also confirmed that the new tax laws may not be favorable as the market could see initial declines. However, Michael Novogratz, former hedge fund manager, and Democratic donor, alongside others have said Biden’s tax policies would benefit the market over time.

“In the long run, if you get the country right and you get that balance right, markets will be stronger,” he told CNBC.