Fundstrat’s Tom Lee says markets are getting a lift from $6 trillion that’s been sitting on the sidelines.
In a brand new interview on CNBC’s Squawk Field, Lee says that the huge quantities of liquidity on the prepared might now be extra related for figuring out whether or not markets stay in an uptrend than macroeconomic knowledge.
“We’ve sort of been type of fooled by seasonality as a result of we thought markets could be hesitant earlier than the elections and it’s October, however we’ve seen this market be extremely resilient. So I’ve underestimated how robust this market’s been. I believe it actually exhibits macro knowledge is changing into much less necessary, and it’s now the truth that a number of money has been on the sidelines.
For the final two years, traders anticipated a recession, or many thought when the [Yield] curve un-inverts we’ve bought a recession. However on the finish of the day, there’s $6 trillion of money on the sidelines, and October has turned out to be a terrific month.”
With markets displaying continued power, he suggests that cash individuals had been socking away beneath the expectation {that a} recession would hit might begin returning to the inventory market and ship equities even increased.
“It looks like traders are under-invested in shares. I believe there’s individuals who’ve dreaded 2024 considering that is the 12 months we slip right into a recession, and as an alternative, and we’re seeing it with earnings, corporations have been actually resilient.”
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