Fundstrat Head of Research Tom Lee believes the past month’s stocks rally represents the start of a new bull market. That is helping him fortify his year-end S&P 500 price target of 6,600, representing a gain of 12% from Monday’s levels.
“I think that’s still a reasonable expectation,” Lee said on CNBC’s Squawk Box with Joe Kernen, Becky Quick and Andrew Ross Sorkin. “6,600 seems more achievable today than it did in February.” The S&P 500 hit all-time highs on Feb. 19 before tumbling due to tariffs concerns.
The biggest hit came in April on Liberation Day, leading to what Lee has identified as a “waterfall decline.” Investors became worried about an armageddon-style event, leading to a collapse in investor sentiment and positioning. Since then, investors have learned to ignore most tariffs-related headlines and instead focus on earnings, better economic data, and the ongoing artificial intelligence revolution.
In economic data, Lee pointed to the ISM manufacturing index, which is still below 50 and thus signaling that the economy is in contraction territory and early cycle, he said. When it goes above 50, it will reinforce the start of a new bull market.
Lee also isn’t too concerned about the recent panic in the bond market, which has been jolted in recent weeks as investors are reminded about the U.S.’s growing deficit.
“When investors worry about it rising too dramatically, I think that’s when the bond market can have some influence on both the Fed and the Treasury. But I think at these levels, it’s not that alarming,” he said.
Among some other areas of the market he is bullish on is bitcoin, expecting the cryptocurrency could hit between $150,000-$250,000 this year due to its scarcity.
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