- Investors are so bearish on stocks that it could signal big gains ahead, Fundstrat’s Tom Lee said.
- Lee forecasted the S&P 500 to rise 14% over the next 12 months as falling inflation boosts equities.
Investors are so bearish on stocks that the market could see a potentially huge rally as the inflation situation improves, according to Fundstrat’s head of research Tom Lee.
In a note on Monday, Lee pointed to strong bearish sentiment in the stock market, with 41% of investors saying they felt pessimistic on their outlook for stocks over the next six months, according to the latest AAII survey. Lee added that the majority of Fundstrat’s institutional investor clients believed the S&P 500 would soon plunge by about 15% to retest its low in October of last year.
But that’s contrary to bullish indicators that are flashing in the market, Lee said, largely due to inflation falling. He forecasted that the benchmark index would actually rise 14% to 4,750 over the next 12 months.