$5,500,000,000,000 in Cash Waiting To Be Pulled In To Stock Market, Says Fundstrat’s Tom Lee
Hedge fund veteran Tom Lee stays bullish on the inventory market regardless of its corrective strikes to begin the month of August.
In a brand new CNBC interview, the Fundstrat World Advisors’ managing companion says this his firm believes that equities are probably within the strategy of carving a backside for the month.
Lee says that just a few macro components are beginning to look favorable for the inventory market.
“I feel there are some constructive issues that occurred (on Friday) that make myself and Mark Newton, our head of technical technique, assume we’re really in a bottoming presumably for the month of August.
The greenback reversed fairly sharply and yields turned down. As you realize, each could be fairly huge headwinds for shares.
As we acquired into August, it’s been a fairly tough 4 days thus far. However I feel the roles quantity was fairly first rate. I’m form of optimistic that we get a great CPI (shopper value index) report (this) week in order that’s a roadmap to seeing shares do higher (this) week.”
The CPI is usually used as a proxy to trace inflation charges. Merchants maintain a detailed eye on the metric because it might doubtlessly sign whether or not the Fed would proceed to lift rates of interest.
Lee additionally notes that institutional traders are fast to flip bearish on the inventory market following the latest correction. In response to the Fundstrat government, the event means that the inventory market just isn’t but euphoric as trillions of {dollars} are nonetheless ready on the sidelines.
“I’m nonetheless fairly stunned what number of of our institutional investor shoppers lean bearish. Within the final 4 days, plenty of them have jumped on to wager in opposition to shares rising. There are technical causes to be slightly bearish in August, however I feel persons are actually fast to flip bearish right here. That’s not an indication of an ebullient market. It’s an indication of individuals getting pulled in, and there’s nonetheless $5.5 trillion of money ready to get pulled in.”
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