Tom Lee Says Buy This Dip as Dow Jones Drops 631 Points
Fundstrat’s Tom Lee says Wall Street overreacted to Wednesday’s fee choice. He’s calling the sharp inventory selloff a shopping for alternative, not a warning signal.
Cyclical shares, financials, and power names took the brunt of the selloff. Lee expects those self same teams to steer any rebound.
Dow Jones Sheds 631 Points
The Dow Jones Industrial Average fell 631 factors, or 1.2%, to shut at 51,461 on Wednesday.
The S&P 500 slipped 0.5% to 7,551. The Nasdaq Composite held roughly flat at 25,978. Retail gross sales for August additionally topped forecasts, easing some recession worries.
The selloff adopted a transfer Lee had flagged days earlier. It deepened as soon as officers signaled more hikes ahead earlier than year-end.
Financials and power shares led the decline as merchants rotated out of rate-sensitive sectors. J.B. Hunt sank 13.3% after warning of a pointy earnings decline.
Lee Sees a Buying Opportunity
Lee cited Goldman Sachs analysis pointing to fading inflation pressures over the following two quarters. He argued that shift ought to let cyclicals, financials, and different rate-sensitive shares rebound.
I might be shopping for this dip.
Tom Lee, head of analysis at Fundstrat, on CNBC
Lee named cyclicals, expertise, shopper discretionary, and financials as the sectors finest positioned to steer.
A Contrarian Take
Dan Greenhaus, chief economist and strategist at Solus Alternative Asset Management, was much less satisfied. He didn’t suppose the Fed wanted to hike in any respect. Still, Greenhaus agreed Wednesday’s market response regarded overdone.
I didn’t suppose they need to hike charges.
Dan Greenhaus, Solus Alternative Asset Management, on CNBC
Greenhaus pointed to weak spots exterior the AI-driven information heart growth. He stated non-residential building has dragged on GDP for roughly eight or 9 quarters. Higher charges, he added, will solely add extra strain there.
Greenhaus additionally cautioned that a lot of Wednesday’s sharp swing was probably algorithm-driven.
Whether Lee’s name pays off could hinge on how briskly that disinflation pattern reveals up.
The publish Tom Lee Says Buy This Dip as Dow Jones Drops 631 Points appeared first on BeInCrypto.
