S&P to surpass 2,100 this year: Fundstrat's Tom Lee

With only seven weeks to go, Wall Street strategist Thomas Lee is sticking by his call that the S&P 500 index could continue to rip higher and surpass 2,100 this year.

Thomas Lee
Adam Jeffery | CNBC
Thomas Lee

Even in the midst of October's lows, as the Ebola epidemic scared investors and technical indicators suggested further downside, the co-founder of Fundstrat Global Advisors remained bullish on the markets.

But Lee, drawing on his 25 years of experience on Wall Street, said Wednesday on "Squawk Alley" that people paid too much attention to the technicals, and he otherwise knew the U.S. would successfully deal with one of the other jitters: the spread of Ebola in the country.

The S&P was trading around 2,037 on Wednesday afternoon.

As 2015 draws near, he sees continued upside.

"We're in a seasonally strong period, so I think the markets will close above our targets," Lee said. "I would say if you feel uncomfortable being long, it's a good sign because that's how bull markets should feel."

Lee played down the rally in utility stocks, typically seen as a bearish sign because investors see the utilities as less volatile. He noted utilities tend to perform well in bull markets, too, and otherwise account for just 2 percent of the S&P.

Lee said it's likely that interest rates will rise next year, especially given the surprisingly strong performance of Treasurys in 2014.

"I think it's going to be a tougher case to be made that rates go lower next year because, you know, there's a lot of pent-up demand, there's a lot of cash on the sidelines," he said. "Europe is stabilizing, China is stabilizing. Things that should make us think more about reflation, not deflation."

A weaker euro and lower oil prices will help Europe's economy rebound in the coming quarters, lifting the stock market, too, he said.