Tom Lee Recommends Investors Take a Risk-On Approach Starting Wednesday
Tom Lee, head of research at Fundstrat, is recommending investors to adopt a risk-on approach starting Wednesday. Despite the ongoing market concerns due to rising yields, weak economic data from China, and a Fitch downgrade, Lee believes that the stock market will soon bottom and resume its upward trend. He suggests that investors should take advantage of Nvidia’s earnings results on Wednesday evening and Federal Reserve Chairman Jerome Powell’s Jackson Hole address on Friday.
Stocks Showing Early Signs of Diverging from Higher Rates
Lee points out that equities are displaying early signs of diverging from higher rates, indicating that stocks may not be significantly impacted by further rate increases. He expects upcoming data to support this trend, with reports indicating weakening inflation and a softening labor market. Lee believes that these factors, along with the historically positive market response following the Jackson Hole address, will further support a rise in equities.
A Calculated Bet on the Bull Market
Lee’s stance on buying “risk” on Wednesday is based on the belief that the bull market remains intact and the current market volatility in August is temporary. He acknowledges the possibility of some uncertainty due to the timing of his recommendation in August, but still encourages investors to seize the opportunity.
