Investor Tom Lee believes that new all-time highs are on the horizon for the S&P 500 as it follows in the footsteps of one risk asset.
In a new CNBC Television interview, Lee says the S&P 500 is tracking the behavior of Bitcoin (BTC), providing several examples throughout the year to show that the crypto king is ahead of the stock market index in terms of price action.
[adinserter block="1"]“Bitcoin has been one month ahead of the S&P at every step this year. In January, it peaked before the S&P. It bottomed before the S&P in April. It made a new high in May, a month ahead of the S&P. And in early July, on July 9th, Bitcoin had a breakaway upside move, gaining more than 10%.
That means that this month, I think the S&P is going to have a breakaway move to the upside toward 6,500 to 6,600.”
Looking further out, Lee predicts that the S&P 500 will hit a much higher price level this year, spurred by a trio of tailwinds.
“I think that at least 6,600 is a minimum because if we’re making 6,600 in the next few weeks, then I think that probably 7,000 is a level we can touch by the end of the year…
Three things are happening. One is that the economy has survived tariff Armageddon. It’s probably strengthening because we know the ISM has been stuck below 50 for 30 months now. So finally, ISM could go above 50.
The second is that we are getting closer to the Fed making a dovish pivot. They’ve been on hold for a long time… That, I think, leads to a re-rate of multiples.
And the third is that I think sentiment is still quite bearish. Many of our clients think that we’re going to have a recession because of the tariffs that started on August 1st. But I think businesses are ready to get through that, and that sentiment collapsing helps PEs (price to earnings).”
As of Friday’s close, the S&P 500 is trading at 6,389.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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