Tags: tom lee | stock | market | rally

Fundstrat's Tom Lee: Market Set to Jump 10 Percent in 'Relief Rally'

(Nuthawut Somsuk/Dreamstime)

By    |   Tuesday, 06 November 2018 04:33 PM

Investment guru Tom Lee predicts the stock market could soar at least 10 percent in a "relief rally" after Tuesday's midterm elections.

With so much risk recently taken off the table heading into the elections, "it's easily a recipe for a big bounce," Fundstrat's Lee told CNBC.

Lee see the S&P 500 hitting 3,025 by year's end. The index closed near 2,738 Monday.

Lee predicts a "second wave" of buying as investors return to the bruised and battered market and "buy what got beaten up." Lee sees a wide array of bargains in many industries such as technology, discretionary, industrials, energy and materials.

Meanwhile, if the result of the election is a split Congress, where Democrats take the House and Republicans keep the Senate, it "is really not great for next year," CNBC.com quoted him as saying.

"I don't think it matters into year-end," he said. "Until year-end, it is still a relief rally."

To be sure, U.S. stocks rose on Tuesday, as strong earnings and easing of trade tensions lifted materials and industrial sectors, but trading volumes were light as uncertainty about the outcome of U.S. midterm elections kept investors on the sidelines, Reuters reported.

Financial markets are bracing for President Donald Trump’s Republican party losing control of the House of Representatives, while retaining the Senate.

A political gridlock between the White House and Congress could hinder Trump’s pro-business agenda and raise concerns about political instability, but most analysts say this may not be the worst outcome for the stock market.

Many fear that there could be a sharp selloff in the market if the Democrats sweep both the House and the Senate. In contrast, stocks may rally on hopes of more tax cuts if Republicans retain control of the House.

However, some respected economic gurus do have predictions of how the market will react.

Billionaire Thomas Peterffy predicts that the stock market will plunge up to 15 percent should Democrats take the House and Senate in the midterm elections.

The founder and chairman of Interactive Brokers, one of the nation’s leading digital brokers, says the market will surge back to record highs if Republicans retain control and ward off a Blue Wave on Tuesday.

“If the Republicans win, the market is not going go down. The market is going to go up,” he told Newsmax TV in an exclusive interview.

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Investment guru Tom Lee predicts the stock market could soar at least 10 percent in a "relief rally" after Tuesday's midterm elections.
tom lee, stock, market, rally
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2018-33-06
Tuesday, 06 November 2018 04:33 PM
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