Stock markets bottom in the early stages of military conflict, says Tom Lee. Here's what the strategist expects now.
Fundstrat's Tom Lee believes that stock markets typically bottom out in the early stages of military conflict, citing historical precedent. Lee expects the S&P 500 to recover, driven by the US economy's ability to handle $100 oil and the potential for higher defense spending to boost GDP.
Tom Lee of Fundstrat says stock markets usually bottom within the first 10% of a war's duration. He notes that investors price adverse risks early and quickly. The S&P 500 jumped 2.9% to 6,528 on Tuesday. Lee thinks the US economy can handle $100 oil, as it is a net exporter. Higher defense spending could add $20-30 billion to GDP monthly, offsetting the impact of higher oil prices. Lee believes the equity market is close to the bottom, citing a technical sentiment indicator.
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