Fundstrat’s Tom Lee Predicts 20% Stock Market Crash After Massive Rally to New All-Time Highs – Here’s the Timeline

Market strategist Tom Lee believes the US stock market will enter bear territory this year, but not before ascending to a new record level.

In a new CNBC interview, Lee predicts that the S&P 500 will continue to rally in the coming weeks after mostly trading in a narrow range so far this year.

But Lee warns that stock market bears will likely come out in full force toward the end of the year.

“Our take is that we do expect that decline to happen when markets don’t respond to good news. So I think we’re in a period where we had a bear market already in software, the Mag 7, and in crypto.

I think that’s already taken out a lot of speculation. So to me, I think our bet would be that markets are actually going to lift through the end of the month, that we’re going to actually be positive for March, and maybe hit 7,300. Later in the year is when we think a bear market might show itself.”

Looking at oil, Lee explains why price spikes are bullish for the stock market.

“One, the US is an exporter of oil, so we net benefit as an economy from higher oil [prices]. The second is that other countries are importers. So the US not only looks better, but on a relative growth basis, it should outperform, which means flows back into the US, and the third is, as we worry about global growth for all the reasons you described, when growth is scarce, people buy growth stocks. The US stock market is a growth index, so it’s coming out of the rest of the world back into the US.

So I think it’s a rotation story.”

At time of writing, the S&P 500 (SPX) is trading at 6,672, while oil (WTI) is worth $95.63 per barrel.

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