6 reasons stocks could surprise to the upside this month despite historically meager returns in August, according to Fundstrat

• Although a historically turbulent month for investing, August could surprise to the upside this year, Fundstrat's Thomas Lee said.
• The veteran strategist anticipates stocks to chop higher throughout the month.
• Lee cited positive coronavirus case data and strengthening commodities as factors to consider.

Investors should be wary of markets in August given historical performance, but there are a few reasons why stocks may surprise to the upside in this month, Fundstrat's Thomas Lee said.

In a Monday note, the head of research said that although investors tend to take time off during August, leading to reduced liquidity and turbulent markets, the month could see stocks moving higher.

He cautioned that this is "not a high conviction view," but laid out several reasons factors investors should consider right now.

For one, US COVID-19 cases could peak in the next 7-10 days according to Fundstrat's data analysis. Meanwhile, incremental hospitalization rates seem to be rolling over and Dr. Fauci and other policymakers are stating that new lockdowns - which would likely spook markets - are unlikely.

Positive news on the pandemic front is coupled with the fact that commodities have been quietly strengthening, with oil near a two-year high and bitcoin steadily closing in on $40,000.

Lastly, odds are favoring a rise in US interest rates in the coming weeks, with Fundstrat's estimates showing that the 10-year could "march higher" into the year-end.

On Tuesday, Lee followed up in another note stating that August will ultimately be a "risk on" month that will "chop higher," if Fundstrat's base case of COVID-19 cases declining.