Investor Tom Lee says that US shares are still in the middle of a bull’s cycle after completing a normal price correction.
In a new video update for investors on the YouTube channel of Fundstrat, the main investment officer of the company that he is convinced that the S&P 500 has already printed his layer, but he simply does not know for sure whether a quick V-shaped recovery such as 2020 will take place or whether a consolidation will unfold in 2011.
Lee says that the interpretation of investors of different risks, such as rates and inflation expectations, will probably determine the next step of the stock market.
“I think we are still in a bull market. I just am not clear whether it is a V-shaped recovery such as 2020 or it is a reach market like 2011.
Intuitively I will say that it makes sense that we have made a bottom, but we may be a bit tied. And that is because people are worried that there are other shoes to drop. The rate war with China could become a cold war. Investors are going to worry about the wrinkle effects of this shock, leading to a global recession. These are also extreme views.
[Or] That some people are going to worry about a financial crisis of all this delepaaging, and that inflation expectations can rise to a certain extent that we get ‘Greedflation’. That is where companies actually increase prices, and it will force the FED to walk. And of course, if estimates fall more than 20%, shares have a downside because the stock market already had a marking of 20%. “
Lee shares a graph that shows that only 6% of the shares in the S&P 500 are above their 50-day advancing average and is only 19% above their 200-day progressive average. The investor says that the set -up has had high profit prices for bulls historically.
“This is the percentage of shares above the 50-day advancing average at the top, and above the 200-day advancing average at the bottom. Under 20% is a major problem, because in the last 16 years the S&P was six months and 12 months later higher. In fact, if you look at three months later, outside 2022, the stock market was higher three months later.” ”
From the end of Friday, the S&P 500 acts at 5,282 points.
https://www.youtube.com/watch?v=C15D8F3SUMW
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