Tom Lee says it’s ‘very probable’ stocks will sail past 7,700 this year
The S & P 500 is likely to surge past 7,700 this year as investors shrug off threats to U.S. stocks posed by the Iran war, Tom Lee, head of research and managing partner at Fundstrat Global Advisors, said. “We’ve come out the other side of this Iran war with the economy showing remarkable strength … so I think we passed that test,” Lee told CNBC’s “Power Lunch” on Monday. “The S & P 500 [rallying] above 7,700 is very probable.” President Donald Trump is reportedly weighing a proposal from Iran that calls for the reopening of the Strait of Hormuz in exchange for the U.S. lifting its blockade of Iranian ports. However, that development may not be enough to end to the nearly 2-month-old war. Still, stocks on Monday rose, with the S & P 500 notching another record close at 7,173.91, or about 7.3% away from Lee’s prediction. .SPX 1Y mountain S & P 500 over the past year Beyond a potential end to the Middle East conflict, there are a few other factors that could push stocks higher, according to Lee. He pointed to the fact that earnings season is off to a strong start , which bodes well for the market. More than 89% of firms have topped analysts’ estimates so far, with the magnitude of surprises for reported bottom-line results sitting above 1200 basis points, according to the investor. Lee also noted that artificial intelligence is beginning to show signs of delivering productivity through business growth and company formation, while the underwriting for private credit “looks better than expected” following the emergence of some cracks in the industry earlier this year. “For stocks for the year, the upside case is strengthening,” Lee said.
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