The risk-reward is quite good for stocks now, says Fundstrat's Tom Lee

Summary

• Tom Lee argues the risk-reward for stocks is now quite favorable, with 90-95% of war-related weakness already priced in.
• Historical analysis of seven major wars shows stock markets typically bottom within the first 10% of the conflict's duration, suggesting the March decline was the bulk of the adjustment.
• If the Iran war ends, the market is "spring-loaded" for an explosive rally due to pent-up optimism and the shift from crisis focus to opportunity.
• Wartime defense spending provides significant economic stimulus, estimated at $30-100 billion per month, outweighing the consumer hit from higher oil prices (every $10 in oil costs about $4-5 billion monthly).
• Inflation is a concern but viewed as a shock rather than a sustained episode if the war is short; the Fed is unlikely to cut rates soon.
• The strong jobs report has alleviated recession fears, supporting the economic outlook despite war uncertainties.
• Lee maintains a year-end S&P 500 target of 7700, implying substantial upside from current levels around 6580.
• Key uncertainties include the war's duration and whether inflation expectations become unanchored, which could lead to higher rates and asset price drops.
• Oil stocks are noted as performing well, but no detailed thesis or specific companies are discussed.
• Cryptocurrency is mentioned as "fine," with no further analysis or directional view.