Tags: Lee | stocks | bull | market

Thomas Lee: Stocks Should Gain 5 Percent for Rest of Year

By    |   Tuesday, 23 September 2014 12:46 PM

Thomas Lee, former chief equity strategist at JPMorgan Chase, sees the Dow Jones Industrial Average and S&P 500 rising about 5 percent by Dec. 31, thanks to economic strength and increased participation by previously reluctant investors.

Gains of 5 percent from Tuesday levels would put the S&P 500 at 2,092 and the Dow at 18,003.

Stocks climbed 10 percent during the same period last year. "We've got, I think, a much stronger economic outlook today. And I think a similar level of underinvestment," Lee, who opened FundStrat Global Advisors last week, tells CNBC.

Editor’s Note:
5 Shocking Reasons the Dow Will Hit 60,000


The economy grew 4.2 percent in the second quarter. Many economists forecast growth of 3 percent or more for the rest of the year.

While stocks have slipped a bit since the S&P 500 and Dow hit record peaks Friday, "I don't think it is really the sign of the start of a 10 percent correction," he notes.

"We're mid-cycle of this bull market. We still have years ahead of us."

He explains investors are "overly worried" about the Federal Reserve raising interest rates. "Until we actually get a hike, the markets generally do pretty well," Lee states.

"Twelve months out I think we're still in a bull market," he adds. "Next year is a time to really be looking for some sort of pullback. But it's going to be around the time we see actually see tightening take place, not in anticipation of tightening."

MarketWatch columnist Michael Sincere is more skeptical of stocks. He says bulls are becoming overconfident, and that spells danger.

"At market tops, it is common to see what I call the 'high-five effect' — that is, investors giving high-fives to each other because they are making so much paper money," Sincere writes. "It's happening now. I’m also suspicious when amateurs come out of the woodwork to insult other investors."

Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000

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Thomas Lee, former chief equity strategist at JPMorgan Chase, sees the Dow Jones Industrial Average and S&P 500 rising about 5 percent by Dec. 31, thanks to economic strength and increased participation by previously reluctant investors.
Lee, stocks, bull, market
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2014-46-23
Tuesday, 23 September 2014 12:46 PM
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