Fundstrat’s Tom Lee believes the current surge in U.S. equities is being met with misplaced skepticism.
Despite the S&P 500 climbing 17% from recent lows and approaching its previous record, many investors remain convinced the rally won’t last.
Lee characterizes the movement as one of the “most hated” in recent memory—driven more by disbelief than momentum. He suggests the hesitancy is tied to past shocks, referencing a steep 20% drop following an unexpected market event.
Drawing on past market behavior, Lee compares the mood to the post-pandemic rebound in 2020 and the October 2022 lows, noting that widespread bearishness persisted even as markets began to recover. “Investors tend to turn bullish only once new highs are set,” he said, arguing that doubt typically fades once milestones are broken.
He also highlighted Bitcoin’s performance as a potential leading signal for equities. With BTC having topped $111,000 weeks before the S&P’s latest surge, Lee sees both markets as riding the same wave of global liquidity expansion.
As for recent concerns around the U.S. credit rating, Lee downplayed Moody’s downgrade, reminding investors that previous rating cuts from S&P in 2011 and Fitch in 2023 had little long-term impact on market direction.
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