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 could now be extra related for figuring out whether or not markets stay in an uptrend than macroeconomic information.
“We’ve sort of been kind of fooled by seasonality as a result of we thought markets can 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 reveals macro information is changing into much less necessary, and it’s now the truth that loads 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 obtained 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 an incredible month.”
With markets exhibiting continued power, he suggests that cash individuals have been socking away below the expectation {that a} recession would hit could begin returning to the inventory market and ship equities even increased.
“It appears like traders are under-invested in shares. I believe there’s individuals who’ve dreaded 2024 pondering that is the 12 months we slip right into a recession, and as an alternative, and we’re seeing it with earnings, firms have been actually resilient.”
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