Tom Lee: Predicts US Stock Market to Enter Bear Market This Year, But Will Hit New Highs Before That

In a recent interview on CNBC, Tom Lee stated that after experiencing narrow fluctuations for most of this year, the S&P 500 index will continue to rise in the coming weeks. However, the US stock market will enter a bear market this year, although it will first climb to new record highs.

Lee warned that bears in the stock market may fully exert their force towards the end of the year.

Our view is that we do expect a decline when the market no longer responds to good news. So I think we are in a period where tech stocks, the 'Big Seven' US stocks, and cryptocurrencies have already experienced a bear market. I think this has squeezed out a lot of speculation. So for me, our judgment is that the market will actually rise by the end of the month, close higher in March, perhaps reaching 7300 points. Later this year, we believe a bear market may emerge.

Regarding oil, Lee explained why a surge in oil prices is positive for the stock market.

First, the US is an oil exporter, so our economy will benefit from the rise in oil prices. Second, other countries are importers. So not only will the US perform better itself, but also on a relative growth basis, it should perform excellently, meaning funds will flow back to the US. Third, as you mentioned all the reasons, when we are concerned about global growth, when growth becomes scarce, people will buy growth stocks. The US stock market is a growth stock index, so funds will flow back to the US from other parts of the world. So I think this is a rotation story.

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