$6,000,000,000,000 in Sidelined Cash Boosting Stock Market, Making Macro Data Less Important: Investor Tom Lee

Fundstrat’s Tom Lee says markets are getting a lift from the $6 trillion that has been sitting on the sidelines.

In a brand new interview on CNBC’s Squawk Field, Lee say that the huge quantities of obtainable liquidity might now be extra related to figuring out whether or not markets stay in an uptrend than macroeconomic knowledge.

“We have been fooled a bit by seasonality as a result of we thought the markets can be hesitant earlier than the election and it is October, however we have seen this market be extremely resilient. So I underestimated how sturdy this market has been. I believe this actually reveals that macro knowledge is turning into much less and fewer vital, and that’s now as a result of the truth that there may be some huge cash on the sidelines.

Traders had been anticipating a recession for the previous two years, or so many thought on the time [Yield] curve is now not inverted, we have now a recession. However on the finish of the day, there’s $6 trillion in money sitting on the sidelines, and October has confirmed to be an incredible month.”

With markets persevering with to be sturdy, he suggests folks had been squirreling away cash in anticipation of a recession, which might return to the inventory market and ship inventory costs even increased.

“It appears like traders are investing too little in shares. I believe there are individuals who concern 2024 and assume that is the 12 months we are going to enter a recession. As an alternative, and we see this within the earnings figures, corporations have been very resilient.”

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