Stock market outlook: Buy the dip amid bearish trifecta, Fundstrat says

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Investors should buy the dip as the stock market will keep climbing amid a trifecta of bearish voices, Fundstrat says

Investors should buy any dip in stocks and can expect the market to keep moving higher from here, according to Fundstrat's head of research Tom Lee., pointed to the S&P 500's strong performance relative 2023, with the benchmark index rising 12% from levels in January. Market breadth, a measure of stocks in the market that are gaining, is also increasing, with tech, small-cap, industrial, and regional bank stocks all moving up in the past month.

That momentum could carry through the rest of the year, Lee suggested, particularly if easing inflation leads the Fed to pause its interest rate hikes.Meanwhile, Lee has forecast the S&P 500 to notch 4,750 by year-end,"This really strengthens the case to buy the dip and expect stocks to continue to rise – that is, if the national and consensus view is caution, then that means most are underinvested," Lee said in a note on Wednesday.

He added that a"trifecta of bearishness" has been coming from sell-side strategists, institutional investors, and retail investors, who are all showing overall pessimism towards stocks.

 

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