Tom Lee said Monday that he expects the strong start of the stock market in April to continue throughout the month as part of what has previously been called a “face-to-face rally.”
Fundstrat Global Advisors co-founder defended his case in an interview with CNBC’s “Fast Money,” after 1.4% of the S&P 500 won Monday to a record close of 4,077.91.
“Institutions have raised nearly $ 200 billion in cash since the beginning of the year, so they have become quite cautious and have been fading or selling their stakes in technology and growth, but they have only just begun. to bite … epicenter [stocks]”Said Lee, whose firm believes they are companies that were among the hardest hit by the pandemic, but that could win with the economic recovery.
“So I think there will be a level of surprise in April because we already had a strong end from Wednesday last week. It’s really three days of strong concentrations and history shows that this is really being built. to be what could potentially be S&P 4,200 before the end of the month, ”Lee said.
The broad equity index that would reach this level would represent about 3% up since Monday’s close.
In addition, Lee said he would turn the April rally into “something that is very strong, but, most importantly, it is a big surprise for the institutions.”
As for what happens after a so-called facial rally, Lee said there could be a period of hectic negotiations.
“I think if the S&P actually stays strong this month at a time when institutions have a lot of cash and there’s so much skepticism in this market, we could see a big chase and that could mark the high of the year.” , He said. “I wouldn’t say this is our base case, but yes, we should consolidate those gains.”