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Ladies and gentlemen, welcome back to the channel. In this video, I want to share with you what Tom Lee said about the stock market today, my thoughts on what is coming next, where the opportunity is in this market, how you should be viewing this market as of right now. Do me a quick favor, hit that like button, subscribe to the channel.
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And you know, that sounds great, but I don't 100% agree with that. And we'll talk about why in just a moment. But first, let me play you this clip from Tom Lee. It's only about 4 minutes long, and you should definitely hear it, especially if you're kind of on the bearish side right now, because you should always seek out a bullish opinion to challenge your own.
Next guest sees more records ahead as one big catalyst may be getting ready to mobilize, which is retail I thought retail investors already were mobilized. Fundstrat's head of research, Tom Lee, is here. He's a CNBC contributor. It's great to have you here, Tom. Um what do you see going on here? Well, I I think that investors got very cautious uh into the build-up of the war.
And they were getting cautious because many stocks held by retail were getting hit. You know, the software stocks. And as that fell, we know there were record inflows into software. And of course, the Mag 7 had been falling. So, I think investors viewed the war and the start of the war as a time to take risk off the table, which was very different than what we saw a year ago when investors were buying into the tariff flows.
And now I think that the downside tail risks have been removed from the war. Hedge funds have been early and they've been adding risk and that we can confirm that from talking to our clients. And I think now it's retail investors that are now beginning to take money off the sidelines and buy stocks.
Maybe this is a psychological or a political question. I'm just curious if you have any insight as to why they would react differently to the Iran war versus not just tariffs, but anything else politically that's happened. I mean, buy the dips has become a well-known catchphrase. So it's surprising that they were you think kind of going the other way this time?
It is surprising. I was quite surprised because I would have assumed, if someone asked me in 2026, a war is going to start, what will retail do? I would assume that they'd buy the dip. But in our surveys with our clients, we found that many maybe had policy uh puzzlement, you know, they didn't really know how big this war could become.
You know, it their biggest fear was gasoline spiking and we could get a recession or a depression and a lot of economists warned of that. So I think it was difficult for investors to say, we can trust what the administration is doing because there were too many people warning about the tail risks of that.
Is it possible they're right? You know, I was in a store earlier today and the radio was on. I haven't heard the radio in a long time. And and the DJ was it was some kind of popular kind of broad station and and he was saying, you know, another check on gasoline prices and boy, aren't they high? And I thought, wow, that's the first time I've heard gasoline prices talked about in a non-business news context in a while.
Um is it possible that actually there is going to be a bigger impact here and the retail investors actually know that and and maybe um the pros are missing it? Uh I mean, anything's definitely possible. Uh one thing that we should that we were at Fundstrat were emphasizing is that inflation-adjusted, even gasoline prices here aren't aren't nearly the burden they were 5 years ago, 10 year ago 10 years ago, even at the 08 peak.
And the war is stimulating the economy and can see that in in the earnings estimates and the ISM and even the jobs report. So, I think the state of the consumer is one thing versus maybe how they might hear in a radio commercial or the surveys, but I do think the consumers in better shape. So, I think the retail investor will end up chasing this stock rally.
And you think as they do that will power it higher? Yes, and and but for the right fundamental reasons cuz earnings estimates are higher. The US is relative relative position has really been strengthened by what's been exposed by supply chains through this war. And I think as the world investor looks for growth and they worry about growth in general, they're going to buy the US stock market which is a growth index.
We're going to talk in just a moment about international and whether, you know, you should not that you have to choose. You can do both, but if you had to pick US versus international, is it US? I'd still be overweighting US because I think if you think about where innovation comes from, whether it's in tech, health care or financial services or fintech, that's really US companies and I think there was a an argument the US PE should derate, but but the war has exposed that the US multiple should be going up.
Really? So, that could be accounting we could get both earnings and multiple expansion this year? Yes, I think once we're through uh you know, this is still going to be a very tricky year because we we have a new Fed chair coming and the market's going to test that Fed chair, but once we get through that subsequent turbulence, we were probably entering, you know, an 18 to 20 months 24-month period that might be the one of the best we've ever seen in our life.
Wow, Tom Lee says once we get through some of the drama in 2026, we're going to be looking at one of the best periods, the the, you know, 12-24 month rallies that we have seen in our entire lifetime. And Tom Lee's correct. You know, as as as bad as people want to you know, hate on Tom Lee and and say this or that, there's a very strong historical precedents to this.
Tom Lee is not just talking out of his ass with this one, right? Throwing around numbers and and predictions and all of that. The data suggests that Tom Lee is correct. You know, not to mention the S&P just went up 12 days in a row. Today you broke that winning streak, of course, but look at the, you know, S&P composite, the four-year presidential cycle composite.
After the midterms, after we get through Fed shenanigans, as, you know, uh Tom Lee put it, you know, drama around Kevin Warsh and the markets testing the new Fed chair, you're looking at a very strong historical rally. At the same time, again, we just came off of 12 green days in a row, and the the velocity of the upside tends to suggest that we could be looking at 30 plus percent upside throughout, you know, the next year or so.
There's a There's a very strong case to be bullish on this market. And I see a lot of retail investors that are completely missing the ball right now. Like, they're not even swinging. They are completely missing the ball because they're emotional about this policy or that policy or that tweet from Trump.
You need to be identifying areas of opportunity and stocks of opportunity in this market and investing in those right now. This is your time to shine. It's right now. It's not tomorrow, it's not next year. You want to be buying these stocks today. Now, . Again, the headline S&P, I don't think it looks as attractive.
I think there's going to be dispersion in this market. I think some stocks are going to do really well. I think some stocks are going to do relatively poorly over the next couple of months. I've been very clear. I think technology, consumer cyclicals, financials, and communication services are going to be the big outperformers over the next, you know, year or two, really.
Next 5, 10 years. Uh versus industrials and consumer staples and energy and utilities and even health care potentially. There could be some opportunities in in health care. I don't want to just group it all into one category, but you know, that is where the opportunity is at right now. And I think if you're a retail investor and you can understand, look, this is what happens You go from one problem to another, right?
Like war with Iran ends, you're just going to be on to the next problem. Wall Street just focuses on problems during midterm election years. That is how it is, okay? You can accept that or or not, but it's just what happens. If you are a savvy investor, if if you want to, you know, make money in this market, if you're not trying to around, you can profit from exactly this, right?
You're going to have a market that is significantly higher a year from now, two years from now. As Tom Lee so says, one of the strongest, you know, markets we've seen in our lifetime could be coming. Now, what areas are interesting? What stocks? I'll even give you some. Elf, Lulu, Nike, right? What about some of those?
Uh Uh Tim Cook is buying Nike stock. I think that's a pretty good indication of a value, if I do say so myself. Within software, Zscaler, Rubrik, UiPath. I I also like ServiceNow or Salesforce or Adobe. You know, these stocks are going to take a little bit longer to come back to to highs for sure. I think Wall Street's not going to be as forgiving.
There's going to be some nervousness around those. mainly unit user interface kind of platforms, workflow management platforms. It's going to take longer for those to um prove themselves, but like cybersecurity and things like that should come back a little bit faster. Okay? Within technology, you have Microsoft, you have Palantir, you have all of those kind of companies that you haven't been able to buy this cheap in a very long time.
Within financials, you have Robinhood. Robinhood has went up a lot. I wanted to buy some Robinhood. That one got away from me with the old PDT rule change. Yeah, people jumped on that one. Um SoFi, you know, some of these stocks still look very attractive to me in this kind of a market environment, especially if we get downside over the next couple of months.
And you have a lot of time to go out and buy these stocks. And that looks really attractive to me. And it looks like an opportunity. Easy opportunity. Easy money. You know, this this is a market on a day-by-day basis is pretty unpredictable, but over the next 12 to 24 months, it is very predictable what's going to happen.
Almost every single data set that we can look at says that stocks are going to be higher a year from now than where they are today. It's not going to get any clearer than that, right? So, those are my thoughts. I I agree with Tom Lee. It's a midterm election year again. There's going to be a lot of worries and concerns.
And in your head, you shouldn't even expect anything good to happen at least until the midterm election is done. And that's November 3rd. So, like between now and November 3rd or really over the summer, you you you shouldn't even think that stocks are going to do well. Who cares? It's your time to buy.
It is your plant It is your time to, you know, plant seeds of your future fortunes. And I want I want all of you guys to be doing that right now. Now, . Obviously, things can happen, things can evolve and change in unexpected ways. I will keep you guys posted and updated on this channel of any changes, what's going on in the economy, anything you guys need to know from that perspective as as well.
Good reason to hit that subscribe button as well as like the video. So, let me know your thoughts on all of this down below in the comments section. us, where we are going out to find these stocks that I think have three, five, 10x opportunities in front of them over the next two to five years, I'm making high conviction investments in those stocks.
I'm not trading those stocks for a week or a month or even a year for that matter. These are long-term investments that I plan to hold for a long time. And I do think we'll do very well. So, if you guys want to join that, that link is down below in the description of today's episode. Have a fantastic rest of your day, and I will see you in the next one.
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