TOM LEE: Stocks Started 2015 The Best Way Possible
Stocks had a rough start to the year.
In the first four trading days, the S&P 500 fell more than 2%, and it wasn't until trading on Thursday that the benchmark index rallied to erase its year-to-date losses.
Fundstrat's Tom Lee says, however, that because we're in a bull market, this is probably the perfect start to the year.
Lee's forecast for the S&P to climb to 2,325 this year is one of the most bullish on Wall Street.
In a note to clients, Lee writes there were 40 other times the market was in negative territory after four days.
In bear market years, stocks finished the year higher 45% of the time. But when stocks were not in a bear market and the economy was not in recession, stocks finished higher 92% of the time.
Lee writes: "[W]e are not in a recession and we have not entered a bear market. Again, this highlights the importance of understanding market regime. The US is in a bull market and hence, dips need to be bought."
Lee also included this chart of how stocks performed in every bull market without a recession.
It was only in 1962 that the S&P 500 finished the year negative after weakness in the first four days. "It was the 'Kennedy slide' and to this day, the reasons for the decline are unclear," Lee says.
Fundstrat
- Luxury “floating” beach unveiled in France, termed an “ecological aberration”
- Scientists think they’ve spotted 60 potential alien power plants in the Milky Way!
- Bread, butter, milk-based health drinks, cooking oils classified as ultra-processed food, ICMR advises restriction
- Debt, equity holders approve merger of IDFC with IDFC First Bank
- Sunrisers Hyderabad to take on Punjab Kings as they look to grab the second spot in IPL points table