Tom Lee, who called the market comeback, says stocks can still go higher amid the virus case uptick

Published Fri, Jun 26 20201:23 PM EDT

(This story is for CNBC Pro subscribers only.) Tom Lee, founder and head of research at Fundstrat Global Advisors, said he is still bullish on stocks despite the market pullback this week due to a resurgence in coronavirus cases. "We've had a pretty big setback in the data in the past few days and I think its understandable for stocks to be weak but I think one of the things that we're still constructive on is the idea that states can open safely," Lee — who called the market rebound — said on CNBC's "Halftime Report" on Friday. "I think this is an environment where patient capital is really going to be the best strategy." A rising number of Covid-19 cases in the U.S. and abroad this week caused investors to ditch riskier assets on fears about the economic recovery. Some states, like Texas, even said it will roll back some reopening measures as cases and hospitalizations spike. Safely opening is a possibility, said Lee, like he is seeing in New York, New Jersey, Connecticut, Michigan and Maryland. "I think at the end of the day, we had a setback, a lot of cases, its not good what's happening in Florida, Texas, but were watching deaths which are lagging and I think many states are taking the right steps to open safely. And if you open safely you don't have to roll back all this progress." Lee said the market can still chug higher, even with a slew of bad health data. "You can get a resilient recovery even if we are wearing masks and social distancing," Lee added. Lee said its important for the market to digest the gains it has achieved during the massive comeback from the March lows. Lee was one of the first Wall Street strategists to call the market's sharp rebound from its late-March lows. In early April, Lee told CNBC that the "faster you fall, the faster you recover," noting the market recovers half of its losses in half the time it took to fall. Lee on Friday reiterated his year-end S & P 500 target of 3,450, which would be a record high. Lee also said he would stick to investing in the companies most beaten down by the pandemic, or the "epicenter groups." The epicenter groups refer to stocks such as airlines, casinos, cruises and real estate among others. Lee said it is where investors will find the most value and upside. "If these companies aren't destroyed both on the equity and credit side, but especially credit, I think they are a lot more resilient than people realize," said Lee. "If they are showing durability here, they are actually attractive companies because they have survived the greatest stress test in over 100 years."

Tom Lee, Fundstrat Global Advisors

Scott Mlyn | CNBC

(This story is for CNBC Pro subscribers only.)

Tom Lee, founder and head of research at Fundstrat Global Advisors, said he is still bullish on stocks despite the market pullback this week due to a resurgence in coronavirus cases.

"We've had a pretty big setback in the data in the past few days and I think its understandable for stocks to be weak but I think one of the things that we're still constructive on is the idea that states can open safely," Lee — who called the market rebound — said on CNBC's "Halftime Report" on Friday. "I think this is an environment where patient capital is really going to be the best strategy."

A rising number of Covid-19 cases in the U.S. and abroad this week caused investors to ditch riskier assets on fears about the economic recovery. Some states, like Texas, even said it will roll back some reopening measures as cases and hospitalizations spike.

Safely opening is a possibility, said Lee, like he is seeing in New York, New Jersey, Connecticut, Michigan and Maryland.