Tom Lee said Monday he expects the stock market’s strong start to continue throughout April as part of what he previously called a “face-ripper rally.”
The co-founder of Fundstrat Global Advisors expressed his case in an interview on CNBC’s “Fast Money”, following the S&P 500’s 1.4% gain of a record 4,077.91.
‘Institutions have raised nearly $ 200 billion in cash since the beginning of the year, so they became very careful and faded or sold their technology and growth owners, but they just started nibbling at the … epicenter [stocks]”” says Lee, whose firm considers the companies to be one of the hardest hit in the pandemic, but who are benefiting from the economic recovery.
“So I think there’s some surprise in April, because we already had a strong finish on Wednesday last week. It’s really three days of strong rallies and history shows that it’s really building up to a potential S&P 4,200. before the end of the month, ‘Lee said.
The broad stock index reaching the level would be about 3% higher than the end of Monday.
In addition, Lee said the April rally “is something that is both very strong, but, more importantly, a big surprise for institutions.”
As for what happens after a so-called face-ripper rally, Lee said there could be a period of bad trade.
“I think if the S&P is indeed picking up strongly this month at a time when institutions are sitting on so much cash and there is so much skepticism in this market, we could see a big chase and it could be the highlight of the year,” he said. said. “I would not say that this is our basic business, but yes, we will have to consolidate these profits.”