Tom Lee told CNBC on Tuesday that while he was overly optimistic about the stock market's performance so far this year, he sees positive risk-reward for investors in the second half of the year. "Our base case for this first half of this year was 'stocks would be treacherous.' … It's been a far deeper correction than we expected, but I don't think the contours of the rest of the year change that much," Lee, the head of research at Fundstrat Global Advisors, said in an interview on " Halftime Report ." "Going forward, I don't think investors can get hurt. I mean, the risk-reward is just too strong. … It could get worse if we actually break into recession, but again, I think the stock market is priced more than 50% chance. I think that's far higher than what credit is priced," he later added. Lee's comments come as the stock market trends higher on Tuesday after months of volatility. Markets became even shakier in recent weeks due to skyrocketing inflation , Russia's invasion of Ukraine and Covid fears . On Tuesday afternoon around 2:15 p.m. ET, the broad market index gained about 1.4% while the Nasdaq rose around 1.8%. The Dow Jones Industrial Average increased 1.2%. Also spurring market instability is the Federal Reserve 's two-day meeting slated to conclude Wednesday. Investors are also expecting the first quarter-percentage-point rate hike since 2018. Lee said that in addition to seeing positive risk-reward, he expects that the headwinds currently scaring investors will turn into tailwinds for the second half of this year and listed the reasons why: Investors should put oil price surges into perspective. Lee noted that oil is still cheap on a price per barrel basis. Indeed, oil prices continued to slide on Tuesday, dipping below $100 a barrel after topping $130 last week. The central bank is aiming for appropriate policy. "In terms of the Fed not having a put, because it's going to tighten, I think it's really going to depend on the path of not only the [Russian-Ukrainian] war, but supply chain glitches. … I think they're trying to take appropriate policy," Lee said. The selling pressure on the markets will abate. "I think we're forgetting that these sanctions against oligarchs, that's close to $300 billion of externally managed money that a lot of hedge funds now have to either freeze or redeem, and that's putting a lot of selling pressures on markets," he said. Lee maintained that despite fears of a recession, he expects the market to start to recover. "I think a lot of things that we're seeing that look like amplified downside pressure could be transitory," he said.
Tom Lee told CNBC on Tuesday that while he was overly optimistic about the stock market's performance so far this year, he sees positive risk-reward for investors in the second half of the year.