Despite Markets Hitting New All-Time Highs, We Urge Caution  Array ( [cookie] => 3a95af-d9d131-7e4337-da76db-a2804b [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 1 [subscriber] => 0 [role] => fsi_macro [visitor_id] => 564835 [reason] => [method] => ) 1

“Well, all I know is this — nothing you ever learn is really wasted, and will sometime be used.” ~ Julia Child

Good evening,

We closed out the week with the S&P 500 hitting all-time highs, an unambiguously positive milestone. Yet the celebratory mood at Fundstrat was somewhat muted this week. Head of Research Tom Lee argued that “the easy money has been made for now.” This is illustrated in our Chart of the Week:

As Lee has previously written, the beginning of January tends to foreshadow how the full year will play out, and in his view, the “sloppy trading” we have seen thus far “is a reminder to expect a challenging year.” He said, “We are now overbought [...] so this is not a full ‘risk-on’ market.” 

Ever since presenting his 2024 Market Outlook in December, Lee has warned that although we could see strong gains in the second half of the year, the first half of 2024 would likely be challenging. So far, he sees markets hewing to his forecast. “It’s true that the indices have been holding up – the S&P has been somewhat flat year to date and the Nasdaq is up almost 1%,” he acknowledged. “However, those owning individual stocks might have noticed a lot more tumult and turmoil,” he suggested.