Fundstrat World Advisors’ managing accomplice Tom Lee thinks the horrible macroeconomic situations of 2022 are “unlikely to persist” subsequent yr.
In a brand new Twitter thread, Lee says that he thinks inflation is falling sooner than the markets and the Federal Reserve count on.
The CNBC contributor additionally notes the Fed likes to see a powerful labor market.
“Reminder, many inflation drivers have actually imploded and down/flat for 2022 after surging mid-year. One doesn’t need to look far to see progress.
Whereas wages matter, the Fed doesn’t need to crush the economic system and doesn’t essentially need to crush jobs.”
Lee additionally says shares are likely to bounce again after down years.
“Except the inflation disaster persists, monetary situations will ease. This implies shares rise, and shares hardly ever publish back-to-back annual declines In actual fact, three of the 5 best-ever annual beneficial properties got here after a ‘damaging’ yr…
And it nonetheless puzzles me why the US is the worst-performing international inventory market in 2022 exterior of China-zone-ish international locations. Why is Europe outperforming when Europe is within the tooth of an vitality crunch/inflation spiral?”
Lee factors to a stat shared by Matt Cerminaro, a analysis affiliate at Fundstrat. Cerminaro notes that there have been solely three years previously 50 (1974, 2002 and 2008) when the S&P 500 has had as many -1% days as 2022.
The years following 1974, 2002 and 2008 all witnessed a minimum of 23% beneficial properties, according to Cerminaro.
“Traders have had a painful yr.
S&P 500 in 2022 has had 63 -1% days. Ouch.
Previously 50 years, there have solely been 3 years with as many days down -1%:
1974: n= 67
2002: n= 73
2008: n= 75
Returns in following Yr:
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