Jeremy Siegel: No Double-Digit Earnings Growth Expected in 2025 Amidst Tariff Uncertainty

Market Reaction to Tariffs

• 🎯 Tariff negotiations are a key market driver, with a favorable outcome depending on a willingness to lower tariffs reciprocally.
• ⚠️ Rigid stances on tariffs, especially above 15%, are expected to be negatively received by the market.
• 📉 The uncertainty surrounding tariffs has already caused significant damage, impacting GDP and leading to a decline in foreign travel to the US.

Economic Ramifications of Tariffs

• ⚡ Potential retaliation from the EU, Canada, and Mexico poses a significant negative shock to the market.
• ⚖️ A move towards zero tariffs would be ideal but appears distant, with current discussions focusing on potential reductions.
• 📊 The market has already priced in substantial declines, with the 'Trump bump' largely eliminated due to a tougher tariff stance than anticipated.

Earnings Growth Projections

• 📉 Double-digit earnings growth is not anticipated for the current year, with projections for the first quarter between 0% and 1%.
• 📈 Future earnings growth projections for 2025 and 2026 are considered too high, especially given the impact of tariffs and the difficulty in achieving 15% earnings boosts from 2-2.5% GDP growth.
• ⚠️ The biggest wildcard is the actual earnings numbers and the multiples investors are willing to pay for them, with potential for further downside if tariffs escalate.