Fundstrat‘s Tom Lee believes markets are poised for a rebound despite widespread investor anxiety ahead of President Donald Trump‘s anticipated tariff announcement on Wednesday.
What Happened: “Markets are deeply oversold,” Lee wrote on Monday on X, adding that “too many are only pricing in ‘worst case’” scenarios. He said that Bitcoin BTC/USD “likely leads bounce when recovery starts.”
Lee, Fundstrat’s Head of Research and Chief Investment Officer, noted high anxiety among fund managers who fear economic downturn following Trump’s Apr. 2 “Liberation Day” announcements. These concerns stem from uncertainty around tariff impacts and the Trump administration’s policies.
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) March 31, 2025
Over weekend, fund managers convos: common view “economy will tank” post-4/2 liberation day
anxiety high due to:
– need clarity
– how much tariffs hurt
– fears Trump policiesFear getting priced in. US proven itself resilient.
Great talking to @JoeSquawk @BeckyQuick…
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) March 31, 2025
“I think investors are a little too scared heading into Wednesday,” Lee told CNBC’s “Squawk Box” on Monday. “Post-Wednesday, markets are going to have some visibility. That allows us to take some of the selling pressure off.”
See Also: April Is Oil’s Best Month, May Second: Will Prices Hit $80 Before Summer?
Why It Matters: The market pessimism comes as the S&P 500, tracked by SPDR S&P 500 ETF Trust SPY, officially entered correction territory earlier this month. The index has recorded its largest quarterly underperformance against global markets since 1988, according to Bloomberg data.
Lee countered stagflation fears, suggesting economists may be overlooking positive factors. “We might end up having better growth, so less stag, and maybe the inflation stuff is more distorting so it’s not as stagflationary,” he said.
The strategist also pointed to the Federal Reserve’s relatively dovish stance as a potential positive catalyst. Fed Chair Jerome Powell is scheduled to speak Friday following the nonfarm payrolls report.
A Benzinga poll found 48% of respondents believe markets will crash following Trump’s reciprocal tariff announcement, while 29% expect little impact and 23% anticipate a market rise.
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