Tom Lee: US stocks are expected to enter a bear market this year, but will hit new highs before that.
BlockBeats news, on March 16, in a recent interview with CNBC, Tom Lee stated that after experiencing a narrow range of fluctuations for most of this year, he believes the S&P 500 index will continue to rise in the coming weeks. However, the US stock market will enter a bear market this year, although it will first climb to new record highs before that happens.
Lee warned that stock market bears may make a full move towards the end of the year.
"Our view is that we do expect a decline to occur when the market stops responding to good news. So I think we are in a period where software stocks, the 'Magnificent Seven' of US stocks, and cryptocurrencies have already gone through a bear market. I believe this has squeezed out a lot of speculation. So for me, our judgment is that the market will actually rise before the end of the month, with gains in March, perhaps reaching 7300 points. Later this year, we think a bear market may emerge."
Speaking about oil, Lee explained why a surge in oil prices is positive for the stock market.
"First, the US is an oil exporter, so our economy will benefit net from rising oil prices. Second, other countries are importers. So not only does the US perform better itself, but on a relative growth basis, it should also outperform, which means capital will flow back to the US. Third, as you mentioned for all these reasons, when we worry about global growth, when growth becomes scarce, people buy growth stocks. The US stock market is a growth stock index, so capital will flow back to the US from other parts of the world. So I think this is a story of rotation."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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