Stocks Could Snap Their “Ugly Downtrend by the End of 2022, Says Fundstrat’s Tom Lee

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Fundstrat's Tom Lee
Fundstrat's Tom Lee

Stocks could snap their “ugly downtrend” by the end of the year, and bearish investors saying otherwise are unrealistic for thinking that market fundamentals won’t change, according to Fundstrat’s head of research Tom Lee.

Stocks have grappled with high inflation and aggressive rate hikes from the Federal Reserve this year, with the S&P 500 plummeting 25% since January. And while a further downside is possible, Lee argued that the S&P 500 could potentially bounce back from its losses this year, as the outlook on inflation and other market fundamentals may improve more than expected.

“Markets have been in an ugly downtrend… but price can change if fundamentals change. And I think in between now and year-end, as much as investors are glum and pessimistic, there are things that present themselves as things that could change how price reacts,” Lee said in an interview with CNBC.

“I think there are potential fundamental positive catalysts between now and year end. I know there’s price and momentum’s negative, but it doesn’t mean that that’s going to govern what markets are going to do for the rest of the year,” Lee said.