While recent data on the consumer have been less than encouraging, the market is sending a different signal, strategist Tom Lee said Monday.
"I know we've gotten some mixed data in the consumer spending, but it is just not reflected in the consumer cyclicals, the founder of Funstrat Global Advisors said in an interview with CNBC's "Squawk on the Street."
"If I had to say do I trust the market signals or the data, I think the market signals are telling us consumers are in better shape."
U.S. consumer spending in June advanced at its slowest pace in four months, increasing 0.2 percent, the Commerce Department said Monday. On the other hand, personal income rose 0.4 percent for the month.
Consumer confidence also appears to be slipping. Last week, the Conference Board's Consumer Confidence Index dipped to 90.9 in July, missing estimates. The reading was the lowest level since September.
Lee likes the cyclicals, which he said in the U.S. is largely consumer discretionary, technology and industrials. While the first two are in "pretty good shape, the strong dollar has been making it tough for industrials, he noted.
However, he's positive for the sector in the longer term.
"If I think about the next 18 months, I think industrials could do well because I think dollar concerns are going to abate," he said.
Most investors have reduced risk in the overall market but Lee thinks it's time to be "risk on."
"I think it's a market that's … bracing for a correction, partly because of the Fed and partly because of the calamity in Europe and China," he said.
"But as you know, it if everyone is positioned one way, the probability of it happening is quite low so I think the market will surprise us to the upside."
—Reuters contributed to this report.