Fundstrat says he expects a stock market pullback in early 2024 for these four reasons:

• Fundstrat’s Tom Lee is bullish on the stock market in 2024, but doesn’t expect stocks to rise in a straight line.

• Mr Lee warned that the stock market will decline in the first quarter of 2024.

• These are four reasons why Lee expects a stock market decline to occur in the coming months.

Fundstrat’s Tom Lee is one of Wall Street’s most bullish strategists for 2024, but he doesn’t expect the stock market to rise in a straight line.

Mr Lee warned clients in a note on Friday that the stock market would fall within the first few months of 2024.

To be clear, Lee expects the S&P 500 index to reach an all-time high in January, the stock market rally will continue into next year, and his S&P 500 price target for the end of 2024 is 5,200.

“Reaching all-time highs is an important milestone for the market, and stocks don’t suddenly reverse from there,” Lee said.

However, the stock market, which hit a record high in January, is likely to quickly fall by about 5% in February or March, marking a sabbatical period for the stock market, which has risen 16% since the end of October. Dew.

“In the current situation, if the S&P 500 hits a new all-time high or begins a moderate decline, the S&P 500 could reach 4,400 to 4,500,” Lee warned. “This means the S&P 500 has gotten most of its gains. [the] Late 2024. ”

Mr. Lee cited the following four reasons for expecting stock prices to decline from January onwards.

1. The market could be ahead of the Fed in cutting interest rates. The Fed only expects three rate cuts in 2024, but the market is currently pricing in six rate cuts next year. A decline in expectations about how many rate cuts the Fed will make next year could lead to a downturn in stock prices.

2. “‘Coordinated hacking’ by malicious AI could push AI timelines,” Lee said.

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3. “The stock market needs to consolidate its parabolic rise from the second half of 2023,” Lee said.

4. “The February-March drawdown time frame is consistent with seasonal returns in election years,” Lee said.

Fundstrat said technical strategist Mark Newton said in a note last week that next year’s decline in the stock market should ultimately be bought out, even though trillions of dollars in cash could be an aside to prolong the drop in stock prices. He said it would provide sufficient firepower. .

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