Why Tom Lee Thinks We Could See S&P 15,000 by 2030

Tracy Alloway (0:03)

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Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:24)

And I'm Joe Weisenthal.

Tracy Alloway (0:26)

Joe, every once in a while, I think it's a good idea to pause and consider everything that's happened in the market and how it actually matched up to initial expectations, because I think we're recording this on, let's see, June 18th.

S&P 500 is at another record. Meanwhile, 10-year treasury yields are at what? Like 4.3% now? And I think certainly two years ago, maybe even a year ago, I don't think anyone would have thought that stocks would rally this much in a rising rate environment.

Joe Weisenthal (1:00)

No. I mean, I think this has been, you know, the beginning, the middle of 2020, I'm starting to lose track of the years, parts of 2022, obviously, the stock market was total dead money, going into 2023, I think there was a lot of pessimism, recession. And that would have been like, well, yes, this is what we expect when we get a rising rate environment. Stocks go down, the economy slows, maybe a recession happens.

And then the market turned around, the economy continued to boom. But it's not like they cut rates or anything. And in fact, the main story has been that rate cuts keep getting pushed further into the future, rate cut expectations.

Tracy Alloway (1:36)

Yeah, absolutely. But despite the record in the S&P 500 and all these, you know, we keep talking on the podcast about all the lines going up and to the right.

And there are a lot of them at the moment. There's some nervousness in the market right now. I think that's fair to say. So you see a lot of people, for instance, talking about the lack of breadth in stocks.

Joe Weisenthal (1:58)

Yeah, look, if you're an S&P 500 index fund holder, then there's a lot of conversations. You just turn out, someone's like, oh, there's a lack of breadth. It's like, yeah, whatever, man. My ETF is up 15% through the year. I'm happy with that.

You know, like, that's pretty great no matter what. But if you're an active manager, you want to beat the index. If you're worried about like durability, you might notice the fact that like, you know, if you strip out a few really big tech stocks like Nvidia and a few others, returns are much worse. And so that raises all kinds of anxiety.

Is this entire thing just sort of hanging on endless demand for chips to run AI models?

Tracy Alloway (2:39)

Absolutely. So today I am pleased to say we do indeed have the perfect guest. You know, I said in the intro that almost no one would have expected stocks to be where they are. This person did expect stocks to be where they are currently. This person is one of the few that I can think of that has basically called a lot of the market right over the past year or two.

Joe Weisenthal (2:59)

So probably someone we should talk to.

Tracy Alloway (3:01)

Yes, absolutely. So we are going to be speaking with Tom Lee. He is, of course, the co-founder and head of research at Fundstrat Global Advisors and FS Insight. Tom, welcome to the show.

Tom Lee (3:13)

Thank you very much.

Tracy Alloway (3:14)

So I know you're sometimes described as an Uber bull. Is that a fair characterization of how you feel about markets?

Tom Lee (3:24)

I think that label is not reflective of how I feel about markets. I think that label is generally used by perma bears who've been perma wrong, and it's a cheap shot taken.

Joe Weisenthal (3:38)

OK, but I get that it sounds like a cheap shot.

But on the other hand, Uber bulls or perma bulls historically have like 100 years of lines going up and to the right on their side. So my view when I hear someone being described as a perma bull is, oh, this is someone who, except for like five minutes here and there in 2020 and 2009, is perma correct.

Tom Lee (4:02)

Yeah, I'd say so. I think people don't live in those longer time frames. You know, in the day to day, people live as if this is a street battle and the label uber bull is like someone, well, you know what?

He might lead us out, but I don't trust him because we're in a street fight. And so it's generally, I find people saying it more as a cheap shot.

Joe Weisenthal (4:22)

No, the people who say it are all really obnoxious. That I agree.