Inflationary pressures might have induced the latest market selloff, however Fundstrat’s Tom Lee believes that equities might nonetheless finish the yr increased. The agency’s head of analysis believes that buyers could also be placing an excessive amount of weight into the latest financial knowledge releases exhibiting inflation above economists’ expectations. “The narrative got muddled because that CPI report was a disappointment. But it was driven by what we’d call stubborn components,” he mentioned on CNBC’s ” Closing Bell ” on Friday afternoon. “Inflation is normalizing, it’s just not evident in the total picture.” Lee believes that even when the Federal Reserve solely finally ends up chopping charges as soon as this yr, that might nonetheless be conducive for shares. In reality, Lee believes that the S & P 500 might finish the yr at 5,700 or “maybe even higher,” he mentioned. It nonetheless “makes sense to own what’s working,” he mentioned, so Lee stays bullish on megacap names that might proceed to be purchased on the power of the outlook for synthetic intelligence and the Ozempic weight reduction drug. However he additionally likes small-cap names forward of rate of interest cuts and finds industrial shares engaging because the ISM manufacturing report turns increased.
