- Market bull Tom Lee said he was overly bullish on stocks, saying the selloff had been much worse than expected.
- He said stock prices show investors are expecting a recession, although he said he doesn’t think growth will slow sharply.
- The S&P 500 has fallen more than 10% this year as Russian-Ukrainian and Fed policy have weighed on stocks.
Longtime market bull Tom Lee said he was overly bullish on stocks, saying the start of 2022 had been much worse than expected.
Lee, founder of the specialized research company Fundstrat, told CNBC stocks had undergone a “much deeper correction than we thought possible”.
He said: “It looks like the market is really leaning, especially economic expectations, towards
. It was not something we expected.”
However, Lee said he personally didn’t believe a recession was coming and backed stocks to rebound in the second half.
The benchmark U.S. stock index S&P 500 has fallen more than 10% from its Jan. 3 high, putting it in what Wall Street calls correction territory.
The tech-heavy Nasdaq 100 index suffered even more, falling 20% from recent highs in a so-called
before climbing as stocks rallied on Tuesday.
Lee has long argued that the S&P 500 will rally back to 5,100 by the end of the year as inflation cools and growth continues. The index started the year at around 4,795 but has since fallen to 4,262.
He said CNBC Tuesday that stocks were priced as if the United States were about to enter a recession. Some analysts have said that
interest rates, likely starting Wednesday.could hit growth by raising
But Lee said he doubts the Fed’s monetary policy is hitting growth too hard. He said the central bank may actually make fewer interest rate hikes than investors expect, given the uncertainty and widespread economic hardship caused by Russia’s invasion of Ukraine. .
Lee, who was previously head of U.S. equity strategy at JPMorgan, said he continues to like the look of energy stocks because securing oil supplies has become so important for countries over the past couple of years. years.