Despite the fact that U.S. stocks are nearing all-time highs, Tom Lee of Fundstrat argues the stock market surge has more gas in the tank, even if the following post-pandemic month brings a fair dose of turmoil. Lee, the chairman of Fundstrat Global Advisors, boosted his year-end price goal for the S&P 500 index SPX, +0.05 percent to 4,600 from 4,300 on Wednesday, betting that the broad-market benchmark can gain another 7% in the second half of the year after increasing nearly 14% so far. That would boost the S&P 500’s year-to-date gain to more than 22%, its largest annual return since a 29 percent gain in 2019, according to FactSet data.
Fundstrat Global Advisors is a financial advisory firm based in New York City.
Lee makes the argument for staying “constructive” on equities, citing data that shows big first-half gains are typically followed by larger advances in the second half of the year. Look into: What the drop in the 10-year Treasury yield below 1.5 percent could mean for inflation. Economic growth was picking up steam, interest rates remained stable, the Federal Reserve remained supportive, and the White House was still working on fiscal stimulus plans, according to the Fundstrat analysts. “There are a slew of compelling reasons to remain constructive,” Lee wrote. However, the delta variation of COVID-19 and a choppy July, according to the experts, could undermine his bull thesis. The S&P 500 was flirting with Lee’s earlier projection of 4,300 on Wednesday, as the Dow Jones Industrial Average DJIA, +0.41 percent was up 0.3 percent and the Nasdaq Composite Index COMP, -0.12 percent struggled to gather impetus higher./n
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