One of Wall Street’s biggest bulls says the stock market’s peak is not yet here.

Selling is not going anywhere, we are today’s call Tom Lee, head of research at Fundstrat, one of the Street’s biggest bulls, called Tuesday’s selloff an “overreaction.”

“Is this the peak for stocks in the first half of 2024? In our view, it is unlikely and we believe this pullback will be bought quickly (aka ‘buy on the buy’),” Lee said, adding that investment He also claims that it could be a tough first half for the family.

Why listen to Lee? He was bullish on 2023, when most were tilted in the other direction, and was almost correct in his prediction that the S&P 500 would end at 4,750. He also has one of the highest targets for the S&P 500 this year, at 5,200, which he believes is already too conservative.

In a note to clients, Lee explained the rationale for why stocks could rise further, starting with a “sure sign of a short-term peak” when stocks sell off on good news, but Tuesday’s He pointed out that this was not the case. CPI data. However, he does not believe that the downward trajectory of inflation has stopped.

Second, he believes there is too much “dry powder” on the sidelines. “We need to use up our purchasing power. This is below the July 2023 top. In comparison, margin debt on the New York Stock Exchange remains low. To mark a short-term high, these numbers need to skyrocket,” the strategist said.

Margin refers to the money a trader borrows to buy stocks. If debt levels get too high, traders will be forced to sell, putting stocks at risk. Margin liabilities reached $700 billion at the end of December, with the most recent peak at $710 billion in July, after an 11% share price decline, Lee said.

The idea that a large amount of cash is still sitting idle may not seem so far-fetched. Recall that last November, BlackRock executives said they were looking for homes and dangling about $4 trillion in cash on bystanders.

Perhaps another reason stocks haven’t peaked is because sentiment remains skeptical, Lee said. “Scepticism about inflation, about the economy, about the stock market is being called out loud today. This is not what makes for a short-term top.”

What will come to the top? Broadcasters should focus on the “good news” — “that is, we’re getting some great macro data points and stocks are going to fall,” he says.

Meanwhile, Lee sticks to small-cap stocks through the iShares Russell 2000 ETF.
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And the group believes it is likely to “recover as the market stabilizes.”russell
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By comparison, the stock was the worst of all indexes on Tuesday, falling nearly 4% for the biggest one-day decline since June 2022. Its performance has also lagged compared to other major indexes.

read: Rapid government spending has pushed interest rates to rock bottom, Gundlach says.

market

Stock futures ES00

YM00

NQ00
Tech-led rise as Treasury yields rise

This is a reversal from Tuesday’s strong rise. Gold GC00
The dollar continues to weaken, and the dollar-yen exceeds 150 yen.,
In response, senior Japanese officials warned that they could intervene if necessary.

buzz

Uber Uber
Shares are rising after the ride-hailing group announced its first-ever stock buyback program, with plans to buy back up to $7 billion worth of stock. Elsewhere, company drivers and Lyft drivers are planning a major Valentine’s Day strike.

Rival is LYFT
That beat expectations and sent the stock up 16%, but it was off the 60% jump seen in late trading and was partly related to an earnings error that was later corrected.

opinion: Lyft’s colossal earnings error proves Wall Street should cut back on jargon

Airbnb stock ABNB
It fell after surging on better-than-expected results and guidance.

Amazon AMZN
Founder Jeff Bezos sold another $2 billion, or 12 billion shares. Nvidia NVDA,
Meanwhile, on Tuesday it closed above the e-commerce giant’s market capitalization for the first time since 2002.

Robinhood Markets HOOD says Bitcoin ETF increases demand for virtual currency
CFO Jason Wernick.That could be good news for Coinbase COIN
Too.

Chicago Fed President Austan Goolsby will speak at 9:30 a.m., followed by Fed Vice Chairman for Supervision Michael Barr at 4 p.m.

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