Tom Lee Warns: Market 'Digestion Phase' Incoming, Big Rally Post U.S. Midterm Elections
BlockBeats News, June 5th. Tom Lee, Chairman of the largest Ethereum treasury BitMine and Fundstrat strategist, said in an interview with CNBC that the current market may be in a cycle consisting of three phases. As a well-known Wall Street bullish analyst, Tom Lee has accurately captured the rhythm of the bull market several times in the past few years, but he believes that this round of the market will not rise all the way. As of early June, the S&P 500 index has risen by nearly 11% in the past year, despite facing challenges such as the controversy over the future of artificial intelligence and inflation pressure from the rise in energy prices.
Lee believes that corporate earnings beating expectations is the core driver of the market's rise. The market previously expected first-quarter earnings per share (EPS) to be around $70, but the actual results were close to $80. If this trend continues, the full-year EPS is expected to increase by an additional $40, theoretically providing the S&P 500 index with an upside potential of 800 to 1000 points. He predicts that the current uptrend is still in the first phase, with the S&P 500 index having a slight rise from around 7560 points in early June to potentially further rise to around 7700 points in the short term.
However, Lee expects that the second phase may arrive soon and last until around October, becoming a "digestion period" for the market. He pointed out that the policy uncertainty brought by the new Fed chair, energy supply shocks, and IPOs and unlocks of popular companies like SpaceX, OpenAI, and Anthropic may increase stock supply in the market and put pressure on stock prices, potentially leading to an adjustment similar to a bear market. But he believes that this phase will gradually end after the U.S. midterm elections, and the market is expected to regain momentum, with 2027 possibly becoming "one of the best years this generation of investors has experienced." (Golden Finance)
