Tom Lee said Monday that he expects the strong start of the stock market until April to continue throughout the month, as part of what he previously called a “face-breaking rally.”
Fundstrat Global Advisors co-founded his case in an interview with CNBC’s “Fast Money” following the S&P 500’s 1.4% gain on Monday to a record close of 4,077.91.
“Institutions have raised nearly $ 200 billion in cash since the beginning of the year, so they have become quite cautious and have faded or sold their technology and growth funds, but have only just begun to nibble. epicenter [stocks]”said Lee, whose company believes these are companies that have been among the hardest hit in the pandemic, but which are benefiting from the economic recovery.
“So, I think there will be a level of surprise in April, because we already had a strong end starting last Wednesday. It’s really been three days of strong rallies, and history shows that this is developing to be what S&P 4,200 could be before the end of the month, “Lee said.
The broad equity index that will reach this level would represent about 3% increase compared to the close of Monday.
In addition, Lee said he would hold the April rally “something so powerful, but more importantly, quite a surprise for the institutions.”
As for what happens after a so-called face-ripper rally, Lee said there could be a hectic trading period.
“I think that, in fact, S&P will grow strongly this month at a time when institutions are spending so much money and there is so much skepticism in this market, we could see a big follow-up and that could mark the maximum of the year. “, he said. “I wouldn’t say this is our core case, but yes, we should consolidate those gains.”