‘Abrupt Change of Market Conditions’ Incoming Later This Year for Stocks, Says Fundstrat’s Tom Lee – Here’s Why

Fundstrat’s Tom Lee says the inventory market is headed for an “abrupt change of market circumstances” later this yr, whilst he believes present circumstances stay favorable for shares.

Lee made the comments in a CNBC interview following the Federal Reserve’s June 17 assembly, the place new Fed Chair Kevin Warsh held his first press convention and dropped the central financial institution’s ahead steering on rates of interest.

In keeping with Lee:

“We nonetheless imagine later this yr there may be going to be an abrupt change of market circumstances, one which feels very very similar to a bear market. However we don’t need to stand and name a high. I feel circumstances are nonetheless favorable for shares.”

Lee stated the S&P 500 sits at 7,500 and pointed to the SpaceX IPO as an indication that danger urge for food stays intact, noting the corporate has a float of simply $90 billion.

He outlines three forces he expects to check markets later within the yr: scrutiny tied to the Fed’s new five-task-force assessment course of, extra share unlocks from the SpaceX, Anthropic and OpenAI IPOs, and provide chain shortages stemming from disruptions within the Strait of Hormuz.

A fourth catalyst, Lee says, can be speculative capital working dry, evidenced by stretched margin debt or a rush of money to the sidelines.

Lee says he doesn’t see indicators that traders are bullish sufficient but for that fourth situation to be in place.

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