Dow, S&P 500
The S&P 500 might be sitting at an all-time high, but Fundstrat Co-Founder Tom Lee says now is the time to buy stocks because they’re going higher. | Source: Shutterstock

By CCN: Fundstrat Co-Founder Thomas Lee has been covering the stock market for longer than he’s been analyzing bitcoin. And while crypto has been a tough nut to crack, he’s got a pretty good track record with stocks. Lee’s scorecard bodes well for his latest prediction that the S&P 500 index will reach 3,125 by year-end, which is higher than his previous forecast of 2,925.

S&P 500
The S&P 500 has advanced 17% year-to-date. | Source: Yahoo Finance

So why so bullish? For one thing, stocks have already blown past Fundstrat’s previous target of 2,925 with the S&P currently hovering at 2,940. Also, while many analysts were anticipating a dismal first quarter for earnings, Fundstrat says results were “solid.” As a result, they’re also lifting their 2020 earnings estimates, which is a fly in the ointment to forecasters who suggest companies will miss their growth targets. Not to mention that paltry bond yields have investors hunting returns elsewhere, so it’s risk-on as evidenced not only by a bullish stock market but also in bitcoin.

Fundstrat’s been calling for a “powerful rally once incoming data could prove the resilience of the business cycle.” The stars have now aligned for the S&P 500. Tom Lee is quick to point out that the rally isn’t solely a function of the Fed’s more dovish position on interest rates. He says if they paused and the underlying business data was weak, stocks would never have rallied. But the data stemming from corporate America is underpinning the gains, which is not just a Fed-fueled phenomenon.

Also, he just can’t seem to get enough of the FANG stocks – Facebook, Amazon, Netflix, and Google parent Alphabet. He says tech and financial stocks are leading the pack for the remainder of the year.

‘Buy Stocks Even at new Highs’

Certainly, the narrative has changed in the economy with today’s robust jobs report. The unemployment rate is at its lowest level since 1969, and the economy has been expanding for the past 10 years. This is also a boon for the S&P 500 and the Dow Jones Industrial Average.

“Solid jobs gains shows U.S. resilience and further strengthens case to buy stocks even at new highs,” said Fundstrat’s Lee.

Lee is just as famous for his analysis on crypto as he is for the stock market. As for the haters who can’t seem to let go of Lee’s bullish 2018 bitcoin price target that never came true, he says:

“Guess you are not in bitcoin as a long term bet.”

 

You May Also Like

Deutsche Bank Reveals the Real Reason Stock Market Is at All-Time Highs (& Why It Can’t Continue)

The US stock market is at all-time highs, but what’s driving this ten-year bull market? It’s stock buybacks, according to Deutsche Bank.

Dow Futures Rocket but Warren Buffett’s $128 Billion Skips Overpriced Market

Dow Jones Industrial Average (DJIA) futures point to new stock market highs, so why is Warren Buffett reluctant to invest?

US Steel (NYSE:X) Needs More Than Trump Tariffs to End 2019 in the Green

US Steel (NYSE:X) rose swiftly after President Donald Trump announced the reimposition of tariffs on imports from Brazil and Argentina.

Growth Recession Chokes India as GDP Tumbles, and No One Seems to Care

India’s GDP growth fell to a six-year low in Q2, but the country’s government is in denial while the economy reels under a recession.

Elon Musk’s Inspiration for the Lame Cybertruck Was a James Bond Movie

The Tesla Cybertruck may have been inspired by some cool vehicles, but that doesn’t mean truck-owners will get on board with the design.

Dow Pops While Trump Trade War Hits Unsettling Milestone

The Dow kicked off December with a recovery, but stock market bulls must wrestle with an unsettling trade war milestone.