Fundstrat Global Advisors' Tom Lee believes it's very likely that the bottom for stocks this year is behind us, calling for a "full risk-on" market in the second half of the year. "We believe the S & P 500 has been 'whispering' bottom for some time," Lee, Fundstrat's founder and head of research, said in a note. "And with 1Q2022 behind us, we now assign a > 88% probability that the bottom for 2022 is in." The S & P 500 just wrapped up the first quarter with a near 5% loss, marking its worst quarter since early 2020 when the market suffered a severe sell-off due to the Covid outbreak. A slew of factors weighed on investor sentiment during the first quarter, including the start of a rate hiking cycle from the Federal Reserve, surging inflation and Russia's invasion of Ukraine. Lee believes that the market could see a big rally ahead as long as the U.S. could avoid an economic recession. He calls for the S & P 500 to exceed the 5,100 level before the year-end, which represents about a 12% rally from here. Lee has become a closely watched strategist during the Covid crisis after issuing some timely market calls. He was also one of the few strategists on Wall Street who called the pandemic bottom and the subsequent rebound. The strategist said that quantitative and technical signals also support his bullish view on the market. The S & P 500 was 8% below its 200-day moving average on Feb. 24, and a month later on March 22, the equity benchmark closed about that momentum gauge. This has only happened 31 times since the World War II, which has been a bullish signal, Lee said. Lee has been bullish since the beginning of 2022. In January, he called for a massive risk-on rally in February as several contrarian signals have reached levels that suggested a strong buy signal. However, the S & P 500 fell more than 3% in February.
Tom Lee, Fundstrat Global Advisors
Scott Mlyn | CNBC
Fundstrat Global Advisors' Tom Lee believes it's very likely that the bottom for stocks this year is behind us, calling for a "full risk-on" market in the second half of the year.