Tom Lee: Stock market is in better position now than the all-time highs earlier this year
Speakers
Tom Lee
— Managing Partner & Head of Research, Fundstrat
Summary
Tom Lee discusses the equity market outlook, arguing that US stocks are better positioned now than at previous highs due to resilience to geopolitical shocks and strong earnings. He believes tech stocks will lead the next rally given their growth prospects and attractive valuations, while highlighting reduced tail risks but monitoring commodity shocks.
- Tom Lee is bullish on US stocks, citing resilience to oil price surges.
- He points to rising earnings and economic stimulation from the war.
- Inflation shock concerns may be less than feared.
- He agrees that tech stocks, including the Magnificent 7 and software, should lead the market.
- Tech benefits from strong earnings growth and under-ownership.
- He mentions crypto outperformance as correlated to tech.
- Highlights reduced downside tail risks but watches for commodity shocks.
- Base case is S&P 500 reaching 7300.
Trade Ideas
US stocks resilient and poised for gains.
The US stock market is in a better position now than at earlier all-time highs because it can handle oil price surges, earnings are rising, the war is stimulating the economy, and inflation shocks may be less than feared, with a base case of the S&P 500 reaching 7300.
Tech stocks to lead market rally.
Tech stocks, including the Magnificent 7 and software, should lead the next leg of the market rally because they offer the best earnings growth, valuations have fallen making them attractive, they are under-owned, and they have true moats with consistent earnings growth faster than the S&P.
