Market bull Tom Lee hesitant to jump into this post-Fed rally

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Market bull Tom Lee hesitant to jump into this post-Fed rally

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The S&P 500 and Dow Jones Industrial Average popped to fresh records Thursday, a day after the Fed lowered rates by a half percentage point.Lee was correctly bullish heading into 2024 and has nailed several bold short-term calls on the market.

Tom Lee is not sold on the stock market’s rally after the Federal Reserve cut interest rates. The S & P 500 and Dow Jones Industrial Average popped to fresh records Thursday, a day after the Fed lowered rates by a half percentage point. Many investors expected the central bank to lower rates by just a quarter percentage point. “This Fed cut cycle is setting the stage for markets to be really strong over the next one month or three months,” Lee, the head of research at Fundstrat Global Advisors, told CNBC’s ” Squawk on the Street ” on Thursday. However, Lee added that he is not yet fully confident that stocks will continue their upward trajectory as the U.S. presidential election in November looms. “What the stocks do between now and let’s say, the election day, I think there’s still a lot of uncertainty,” he said. “That’s the reason why I’m a little hesitant for investors to ***** in.” The election is less than 100 days away, and the uncertainty around each candidate’s economic platform has made some investors hesitant about making big bets on certain stocks and sectors before the votes are in. Lee was correctly bullish heading into 2024 and has nailed several bold short-term calls on the market. He was also one of the first on the Street to turn bullish on stocks during the throes of the Covid-19 pandemic. That said, he noted earlier this month that stocks could pull back 7% to 10% . Despite the mixed backdrop, Lee said small-cap and cyclical stocks, such as industrials and financials, stand to benefit from lower rates. They could also be propelled higher by a boost to the economy as deal-making activity picks back up.

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