Tom Lee, a market strategist believes that the US stock markets will be in bearish territory by this year. However, not before reaching a record high.
Lee, in a recent CNBC interview predicts the S&P 500 to continue its rally after trading mainly in a small range this year.
Lee says that the bears in the stock market will be out and about by the end of this year.
Our view is that this decline will occur when the markets do not respond positively to positive news. “Our take is that we do expect this decline to happen when markets don’t respond to good news.”
This has already eliminated a great deal of speculation. To me, our best bet is that the markets will actually rise through the month of March and that the market may even hit 7,300. We think that a bearish market will show up later in the year.
Lee looks at the oil market and explains how price increases are good for stocks.
The US exports oil. Therefore, we as an economic system benefit from the higher [oil] prices. Second, other countries import oil. The US is not just better looking, but it also should perform well on a growth-relative basis. This means that flows will return to the US. US stocks are a growth-index, and so money is flowing from the rest of world into the US.
I believe it is a story about rotation.”
The S&P 500 is currently trading at $6,672 while the WTI oil price is $95.63 per barrel.
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The timeline may change as new information becomes available. Tom Lee, Fundstrat CEO predicts stock market crash of 20% after massive rally to all-time highs.
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