Market is unprepared for the inflation fallout, Wharton’s Jeremy Siegel warns

Published

3 years ago

October 3, 2021

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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.”

His cautious shift is a clear departure from his bullishness in early January. On Jan. 4 on “Trading Nation,” he correctly predicted the Dow would hit 35,000 in 2021, a 14% jump from the year’s first market open. The index hit an all-time high of 35,631.19 on August 16. On Friday, it closed at 34,326.46.

According to Siegel, the biggest threat facing Wall Street is Federal Reserve chair Jerome Powell stepping away from easy money policies much sooner than expected due to surging inflation.

“We all know that a lot of the levity of the equity market is related to the liquidity that the Fed has provided. If that’s going to be taken away faster, that also means that interest rate hikes are going to occur sooner,” he noted. “Both those things are not positives for the equity market.”

Siegel is particularly concerned about the impact on growth stocks, particularly technology. He suggests the tech-heavy Nasdaq, which is 5% away from its record high, is set up for sharp losses.

“There will be a challenge for the long duration stocks,” said Siegel. “The tilt will be towards the value stocks.”

He sees the backdrop boding well for companies benefitting from rising rates, have pricing power and deliver dividends.

“Yield is scarce and you don’t want to lock yourself into to long-term government bonds which I think are going to suffer quite a dramatically over the next six months,” he said.

The inflationary backdrop, according to Siegel, may set-up underperformers utilities and consumer staples, known for their dividends, for a strong run.

“They may have their day in the sun finally,” said Siegel. “If you have a dividend, firms can raise their prices and historically dividends are inflation-protected. They’re not as stable, of course, as a government bond. But they have that inflation protection and a positive yield.”

Siegel is bullish on gold, too. He believes it has become relatively cheap as an inflation hedge and cites bitcoin‘s popularity as a reason.

‘They’re turning to bitcoin, and I think ignoring gold’

“I remember inflation in the 70s. Everyone turned to gold. They turned to collectables. They turned to precious metals,” he said. “Today in our digital world, they’re turning to bitcoin, and I think ignoring gold.”

He’s also not put off by the jump in real estate prices.

“I don’t think it’s a bubble,” Siegel said. “Investors have foreseen some of this inflation…. Mortgage rates are going to have to rise an awful lot more to really, I think, dent real estate. So, I think real estate [and] REITs still are good assets to own.”

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Wheel-E Podcast: NIU electric moped visit, X Games says e-motos too good, more

Published

1 hour ago

March 28, 2025

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Wheel-E Podcast: NIU electric moped visit, X Games says e-motos too good, more

This week on Electrek’s Wheel-E podcast, we discuss the most popular news stories from the world of electric bikes and other nontraditional electric vehicles. This time, that includes a visit to electric moped maker NIU’s factory, Tern’s new GSD e-bike, Rad Power Bikes getting a new CEO, a Segway scooter recall, X Games kicking out electric motorcycles, and more.

The Wheel-E podcast returns every two weeks on Electrek’s YouTube channel, Facebook, Linkedin, and Twitter.

As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.

After the show ends, the video will be archived on YouTube and the audio on all your favorite podcast apps:
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We also have a Patreon if you want to help us to avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.

Here are a few of the articles that we will discuss during the Wheel-E podcast today:

Here’s the live stream for today’s episode starting at 8:00 a.m. ET (or the video after 9:00 a.m. ET):

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Get this $20,000 Tesla conquest deal on Polestar 3 (before the tariffs hit)

Published

1 hour ago

March 28, 2025

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Get this ,000 Tesla conquest deal on Polestar 3 (before the tariffs hit)

Make the switch to Polestar. Save up to $20,000 on a Polestar 3 lease as a Tesla owner.

The Trump Administration just slapped huge tariffs on imported cars, causing many car buyers to accelerate their purchase plans and snap up a new car now, rather than wait. If that’s you, and you’re one of the thousands looking to distance yourself from Tesla, the time is now to check out this $20,000 Tesla conquest deal from Polestar.

It might seem hard to believe now, but once upon a time there were a bunch of otherwise sane, intelligent people who believed that there was “infinite demand” for Tesla’s cars. That’s not true anymore – it’s an objective fact that the two million reservations for Tesla Cybertruck haven’t turned into sales, and the rest of the brand’s cars are losing value three times faster than the rest of the new car market, making them tough to sell or trade in.

That’s where incentives come in – and, while a number of car brands are offering several thousands of dollars to EV buyers looking to make the switch, this $20,000 Tesla conquest deal from Polestar might be the one that’s most aggressively targeting Tesla buyers.

From the Polestar website:

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Calling all Tesla owners. Enjoy up to $20,000 towards the lease of a new Polestar 3 when you combine the $5,000 Polestar Conquest Bonus and the $15,000 Polestar Clean Vehicle Incentive.

Polestar 3 is the SUV that drives like a sports car. Featuring range up to 350 miles, 517 hp, 0-60 mph in 4.5 seconds, and built-in technologies like Google Assistant and Apple CarPlay.

POLESTAR US

Polestar hasn’t been shy about what it views as an “opportunity” to snatch up car buyers who want to distance themselves from Musk. The company’s CEO, German auto industry stalwart Michael Lohscheller, told Bloomberg, “For Germany, somebody outside of Germany endorsing right-wing political parties is a big thing. You want to know what I think about it? I think it’s totally unacceptable. Totally unacceptable. You just don’t do that. This is pure arrogance, and these things will not work.”

He’s hoping enough people agree to move the needle on Polestar sales in the US – and the first step to that is for consumers to get behind the wheel of this “masterfully tuned and sneaky-fast SUV,” and see if it’s a fit for them.

Electrek’s Take

I spent half the day in a local Volvo dealership I’ve had a great relationship with for years. I know those guys well. They typically average about 2-3 units per day.

Yesterday? I arrived around 1:30PM with a sack of spicy chicken sandwiches (if you want good customer service, be a good customer), and they’d already moved a half dozen units by the time I got there. They were looking at another dozen fresh leads from panicked city-dwellers looking to come in and make a deal over the weekend.

It’s about to get weird out there, kids. You could do far worse than trying to navigate said weirdness in a new Polestar.

SOURCE | IMAGES: Polestar.

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Activist investor Elliott takes short position in Shell after building a stake in rival BP

Published

2 hours ago

March 28, 2025

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Activist investor Elliott takes short position in Shell after building a stake in rival BP

A Shell logo is displayed on May 03, 2024 in Austin, Texas.

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U.S. activist investor Elliott Investment Management has taken a short position against British oil major Shell as part of a global hedging program.

The move, which was first reported by British newspaper The Times on Thursday, comes shortly after it emerged Paul Singer’s hedge fund had taken a near 5% stake in Shell’s struggling rival, BP.

Elliott is said to have amassed an £850 million ($1.1 billion) bet against Shell, The Times reported, citing filings with the Financial Conduct Authority.

The position is reportedly worth 0.5% of Shell’s stock and is thought to represent the biggest short position disclosed against the energy major in nearly a decade. A short position refers to a bet that a company’s stock will fall in value.

Elliott and Shell both declined to comment when contacted by CNBC on Friday.

Shares of Shell traded 0.5% lower at around 11 a.m. London time (7 a.m. E.T.) on Friday. The London-listed stock is up around 13.6% year-to-date.

Earlier this month, it was reported that Elliott had taken a short position of around 670 million euros ($722 million) in French oil giant TotalEnergies. A spokesperson for TotalEnergies did not immediately respond to a request for comment on Friday.

“When a hedge fund creates a long position — leveraged or not, because often they use leverage with these positions — they need for risk management purposes to create an opposite position, i.e. a short, into a similar company,” Maurizio Carulli, energy and materials analyst at Quilter Cheviot, said on Friday.

“The most likely reason for that is because it is an offsetting position with respect to the BP one, so both Total and Shell has been created as a short for risk management,” Carulli told CNBC via video call.

“Otherwise, if for any reason the market moves against them — for example, things like oil prices or whatever — they need to have some protection,” he added.

Elliott’s moves come as European energy majors double down on fossil fuels in an effort to boost near-term shareholder returns.

Shell recently announced plans to increase shareholder returns and cut spending as it reinforces its liquified natural gas (LNG) push. BP and Norway’s Equinor, meanwhile, have also outlined respective plans to slash renewable spending in favor of oil and gas.