Stock Market Guru Tom Lee Unveils His 2015 … – Business Insider
FundstratTom Lee.
See Also
RBC’s Jon Golub Comes Out With A Bullish 2015 Prediction
MORGAN STANLEY: ‘It Ain’t A Bubble Yet’
BARCLAYS: Stocks Are Going Nowhere Next Year
“Be contrarian,” Tom Lee says. “Investors are expecting 2015 to be a low-return year and are focusing on deflation and Fed tightening.”
Lee, the former chief US equity strategist for JPMorgan and current head of Fundstrat Global Advisors, expects the S&P 500 to hit 2,325 by the end of 2015.
That would represent a massive 15% gain from Wednesday’s closing price.
“[T]he current bull market is not going to end simply because ‘stocks have gone up too much,'” Lee writes in a note to clients.
Since its March 2009 low, the S&P 500 has surged by over 200%.
“The buyside is fairly cautious, seeing downside stemming from: (i) deflationary pressures of the 40% year-over-year oil decline, deceleration in China, Eurozone weakness, and the fall in 5-year inflation breakevens; and (ii) Fed monetary tightening,” Lee says.
Among other things, Lee continues to see returns fueled by growth in investment spending as equipment and structures continue to wear out.
“Capital stock is again showing signs of pent-up demand, and as a consequence, companies and households will have to invest,” he writes. “In other words, obsolescence is playing a role here. Equipment needs to be replaced as it reaches the end of its useful life.”
Lee, however, is mindful of the possibility that things might not work out as he sees it.
“What could go wrong?” he asks. “The biggest risk is spreading contagion from the weakness in oil to credit markets and sovereign debt. We think these concerns are exaggerated, and this is reflected by the fact that US High Yield and US Investment Grade trades wider than Euro High Yield and Euro Investment Grade.”
All of this fits into Lee’s longer-term call that we are in the midst of a secular bull market.
Lee entered 2014 as the most bullish strategist on Wall Street with his forecast that the S&P 500 would hit 2,075 by year-end. The S&P cleared that hurdle on Dec. 4.
Lee now joins RBC Capital’s Jonathan Golub as being the most bullish Wall Street strategists followed by Business Insider. Here’s what other top Wall Street strategists are expecting for next year:
Credit Suisse’s Andrew Garthwaite: 2,100
Goldman Sachs’ David Kostin: 2,100
Barclays’ Jonathan Glionna: 2,100
Deutsche Bank’s David Bianco: 2,150
BTIG’s Dan Greenhaus: 2,200
Citi’s Tobias Levkovich: 2,200
Bank of America Merrill Lynch’s Savita Subramanian: 2,200
UBS’ Julian Emanuel: 2,225
BMO’s Brian Belski: 2,250
Morgan Stanley’s Adam Parker: 2,275
Oppenheimer’s John Stoltzfus: 2,311
RBC’s Jonathan Golub: 2,325
SEE ALSO: The Stock Market Bull Who Got 2014 Right Just Published This Fantastic Presentation
Visit site:
Stock Market Guru Tom Lee Unveils His 2015 … – Business Insider
