① Fundstrat Capital Chief Investment Officer Tom Lee predicts that the Standard & Poor's... The CSI 500 index is expected to reach 7,000 points by the end of the year; ② Lee points out that the robust corporate profitability provides a basis for optimism, particularly for large banks. The company demonstrated "steady and positive" operating results; ③ Lee still believes that investors are showing low sentiment and the market is experiencing "the most disgusting V-shaped rebound" in 2025.
Tom Lee, chief investment officer at Fundstrat Capital, called the 2025 market “the most disgusting V-shaped rebound ever.” He noted that investor pessimism had reached levels typically seen only during severe bear markets, yet he still expects the S&P 500 to reach 7,000 by the end of the year.
In his latest report released on October 21, Lee pointed out that the persistent and negative investor sentiment is a significant anomaly. He specifically highlighted recent survey data from the American Investors Association (AAII), which showed that there were more bears than bulls, a trend that persisted throughout the year.
Lee stated, "The last time we experienced this kind of 'trough' of negative sentiment was in 1990, 2008, and 2022. These were all bear market years."
He compared this deep-seated fear with the actual market performance and pointed out, "Investors are behaving as if we are in a bear market, yet the market has risen 13% so far this year. So, I call this the most disgusting V-shaped rebound ever."
Solid corporate earnings drive market trends
However, Lee built his optimistic argument on solid corporate earnings. He pointed out that so far this quarter, 84% of S&P 500 companies have exceeded expectations, thanks to companies like JPMorgan Chase. Goldman Sachs The group and other large banks have achieved "steady and positive" operating results.
Lee believes that this widespread panic, combined with strong fundamentals, has fueled the market's sharp rise.
Lee further elaborated on his views in a program, predicting "a rally by the end of the year" as underinvested investors are forced to make concessions. He also reiterated his target for the S&P 500, stating, "I think all of this means the S&P will close at least at 7,000 by the end of the year. In fact, I think that number is too low."
Looking ahead, Lee pointed out that there will be "numerous driving factors" in the next 12 months, including the anticipated Fed easing cycle and improved artificial intelligence. Transparency, profit growth of large enterprises, and the eventual recovery of the ISM manufacturing index (which had been in contraction for 32 consecutive months).
U.S. stocks closed on Wednesday (October 22), with the S&P 500 falling 0.53% to 6699.40 points, while the Nasdaq... The S&P 100 fell 0.99% to 24,879.01 points.
(Article source: CLS)
