Lee: Bearish Bubble Could Fuel Stock Market Rally by Year-End
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Fundstrat's Tom Lee says there is a "bear bubble" of overly negative sentiment among investors towards the stock market.
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Lee points to factors like geopolitical risks, rising debt, high inflation, and commercial real estate conditions as driving persistent bearishness.
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Surveys like AAII and CNN Fear & Greed index show high levels of pessimism despite the S&P 500 being up 15% year-to-date.
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Lee believes the recent stock rally was driven by overly bearish investors having to reverse positions and buy stocks.
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Lee recommends investors "buy the dip" and sees a potential year-end rally to 4,825 on the S&P 500 driven by seasonality and bearish sentiment.