Tags: JPMorgan | Lee | bullish | stocks

JPMorgan's Lee Is Bullish on Stocks

By Dan Weil   |   Wednesday, 30 Oct 2013 08:53 AM

Tom Lee, chief U.S. equity strategist for JPMorgan Chase, sees several positive factors for stocks.

One is that others don't feel the same way.

"No one's really embraced this as a sustainable bull market, and I think when we start to see the market that way, multiples could expand a lot, especially for sectors like technology," he tells CNBC.

Editor’s Note:
5 Reasons Stocks Will Collapse . . .

Both the Standard & Poor's 500 Index and the Dow Jones Industrial Average hit record closing highs Tuesday — 1,771.95 for the S&P 500 and 15,680.35 for the Dow.

Lee says he encounters plenty of doubters. "I still continue to find that both in my meetings with professional managers and with individual investors that they're viewing this rally purely as a Fed-induced sugar high."

In other words, these people believe the Federal Reserve's massive easing program is responsible for the stock market's strength and are therefore holding bearish positions.

"They haven't made much change in allocations — they're happy with their stocks, but in a lot of cases, a lot of asset allocators are actually selling equities," he notes.

But attitudes could soon change, Lee believes.

At the beginning of next year, many companies may begin to increase capital spending, he says. "And if capital spending picks up, that's going to be good news for S&P profit growth, which really helps stocks."

Many investors indeed say the Fed is boosting the market, but plenty of them are bullish toward stocks as a result.

"The anticipation is that the Fed will retain its purchasing of $85 billion in monthly Treasury and mortgage securities [when it finishes its meeting Wednesday]. . . . That will be taken fairly well by the market," Randy Bateman, chief investment officer of Huntington Asset Advisors, tells Bloomberg.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

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Tom Lee, chief U.S. equity strategist for JPMorgan Chase, sees several positive factors for stocks.

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