Fundstrat Head of Research sat down with the Compound and Friends’ Michael Batnick and Josh Brown recently to discuss the latest market moves. Here’s what Lee had to say about three things on top of investors’ minds:
The economy will get through President Donald Trump’s tariffs.
Lee believes that the U.S. economy is undergoing changes similar to Brexit, which could eventually pay dividends. Brown agreed and added that Brexit in 2016 was one of the biggest buying opportunities of the last decade.
“It didn’t upend the economy,” Lee said. “You didn’t have an inflation or growth problem. The U.K. got through it.”
So, too, will stocks.
Growth concerns have been on top of stock investors’ minds. Bond yields have tumbled in response, as well. Two things that could help ease that fear are the Fed and Trump puts, Lee said, explaining that neither the White House nor the Federal Reserve will let the economy get to stall speed.
Lee added that in a way it makes sense for stocks to fall currently, because then the tariff threat will be seen as real to other countries.
“If the Dow and S&P 500 were rallying, no one would take it seriously,” he added.
Don’t give up on tech.
Many have been left puzzled by the tariff-led declines in tech stocks, because they’re not sensitive to changes in the economic outlook. Lee explained that this might be because investors are betting on a weaker consumer, and during tariffs, it’s also easier to sanction the likes of Google.
Within the Magnificent Seven group of tech stocks, Tesla and Nvidia have especially been hit hard, down about 30% and 18% this year, respectively. Despite that, Lee still believes they make for great companies.
He is still optimistic about the bull market.
“I’d be surprised if [bull market] is over,” he added.
Subscribe to FS Insight research by Fundstrat to learn what pegs Tom’s beliefs behind the bull market and what (or who) could serve as the third put in addition to the Fed and Trump put.
