Tom Lee Says New All-Time Highs for Stock Market ‘Part of the Formula,’ Predicts Bull Market Extending to 2025

Fundstrat’s Tom Lee says shares might be heading for brand spanking new all-time highs (ATHs) within the coming months.

In a brand new interview on CNBC, Lee say that three key elements may prolong the S&P 500’s bull market into subsequent 12 months.

“Bull markets are supported by robust fundamentals. And it is a case the place not solely has the economic system survived extraordinarily excessive rates of interest, however the Fed can be beginning to reduce charges. And one economic system that is type of languishing is China, and now we’ve got some stimulus and what looks as if a type of bazooka coverage supporting that area. And we’ve got some huge cash on the sidelines. So I feel that is a system for shares to do fairly nicely over the subsequent three to 12 months, and that is why we expect we’ll get nicely above 5,700 earlier than the tip of the 12 months.”

The S&P 500 is buying and selling above 5,751 on the time of writing.

Lee additionally says small-cap shares are poised to breakout. A small-cap inventory refers to corporations with a market capitalization that’s usually between about $250 million and $2 billion.

“Small caps are inside a couple of proportion factors of their all-time highs. And Mark Newton, our head of technical technique, thinks we’re nonetheless in an upward momentum for small caps which are simply getting began. However yeah, it was disappointing. I feel it has been significantly disappointing as a result of China and small caps have traditionally been fairly extremely correlated, so we’re seeing a rise in threat urge for food in some locations.

However I feel it is solely a matter of time. I feel a few of this can play out between now and subsequent month, round Election Day. There’s a lot for buyers to digest. It consists of oil costs and the VIX (CBOE Volatility Index) has elevated. I feel these are issues which are tough to say at present between now and early November. I wish to purchase threat outright. So I feel small caps nonetheless have good fundamentals. Earnings development is accelerating. The median price-to-earnings ratio (P/E) is 11 instances, which is nearly seven turns decrease than the S&P. So I feel we are able to nonetheless argue that small caps are beginning to make multi-year earnings. It was simply very uneven.”

?

Do not miss a beat – Subscribe to obtain e-mail alerts straight to your inbox

Examine value motion

Comply with us additional X, Facebook And Telegram

Surf to the Every day Hodl combine

Generated picture: Midjourney