Tom Lee: Market is rising for all the right reasons
Speakers
Tom Lee
— Managing Partner & Head of Research, Fundstrat
Summary
Tom Lee discusses his bullish view on equity markets, citing abating tail risks, strong earnings growth, and leadership from Mag-7, tech, and cyclicals. He raised software to a top pick sector and maintains a 7300 S&P 500 target. He expects breadth to follow the tech rally and sees AI boosting productivity.
- Tom Lee believes the market is rising for the right reasons with abating tail risks and good fundamentals.
- S&P 500 base case target is 7300.
- Software ETF (IGV) was raised to a top pick sector.
- Mag-7 and crypto are also named as top picks.
- Earnings growth is strong, driven by AI and productivity gains.
- Breadth narrowing is seen as temporary and expected to improve.
- Institutional investors caught the low while retail missed, leaving room for further upside.
- Market strength is self-reinforcing; strong markets tend to stay strong.
Trade Ideas
Mag-7 is core leadership
The Mag-7 (Magnificent Seven) stocks are part of the leadership driving the market higher, representing a key group to own as tail risks abate and fundamentals improve.
S&P 500 target 7300
The market is rising for the right reasons: tail risks abating, good fundamentals, earnings estimates rising, and leadership from Mag-7, tech, and cyclicals. The base case is for the S&P 500 to make a good move towards 7300.
Software ETF IGV top pick
Fundstrat raised software (ETF IGV) to a top pick sector alongside Mag-7 and crypto, reflecting strong leadership and expected continued outperformance.
