Transcript
0:00 Tom Lee's here, head of research at Fundstrat, chief investment officer of Fundstrat Capital, as well as a CNBC contributor. It's August 3rd. I'm glad to have you here, and I'm glad to have you here at 6:00 a.m. th- just to get your comments. I thought in July, last time you were on, you shook me because you said that we could have, before ending the year, much higher. That we could have a What was the drawdown you said? It it it it it I could have gotten to a six handle on the S&P based on the numbers you were talking about.
0:30 >> Yeah, something that'll feel like a bear market, you know, 10% kind of drawdown. >> That's what you thought. It was not a good month in in for July, and you said that it was even for what you were expecting, it was not as positive as you were thinking, but it the averages didn't do that. They There was a day where the the Dow went down 1250. Who knows what's going You know, that was an AI unwind for that hedge fund to to explain it. Doesn't matter what caused it. It did get down what, 7200? Nowhere near six.
1:02 >> No. >> Or or maybe 73. How low did I I'm I'm just off the top of my head. Is that enough now? >> well, you know, I think August is a month to recover what how June and July have been sort of flat months, but earnings have Earnings estimates have gone up a lot. So, the stock market's kind of a coiled spring. And then we had a huge deleveraging, as you're talking about, because of the AI unwinding, Korea's policy makers panicking. So, I I think the markets could actually rebound strongly this month. Like, maybe we get to 7800.
1:39 >> This month, to 7800? >> Yeah, for the S&P. >> Is that forecast for the 10% drawdown still intact at all? >> Yes. >> It is? >> Yeah, so >> Can't you get take that off the table? Just Will you do it for me? Say it doesn't have to No, kidding. so, we get to 7800 at maybe a 10% drawdown, and then close the year above 8,000. >> Yes. Yeah, I think because as we start to look at 2027, there's a lot of the clouds that are heading this year kind of lift. You know, the SpaceX unlock will be behind us, and the market testing of the new Fed will be behind us. So, I I think and then of course there's already been a leverage unwind.
2:15 So, I think 2027 could be one of the best years for the stock market. >> think part of the positive sentiment this month is going to be cooler inflation data. Why? Why? Oil's back up. >> Yeah, oil's up, and you know, we still have the tariffs working through. So, those are hitting the CPI numbers, but the real driver of inflation historically has been housing and wages. And housing has really disinflated. You know, we've had 3 months now of declining home prices. So, you're taking out one of the biggest weights for inflation, and then I think wage inflation is really muted. I mean, we'll find out this Friday.
2:57 >> Hey Tom, I I just want to ask you what you think of the Leopold Aschenbrenner situation and the idea that he was highly leveraged four times, had that unwind this stuff. How much of that played into what you were just talking about with South Korea and the panic that happened there? How much of that was because he was selling that portfolio at the same time? >> I think it was a a big factor because as you know, Korea's basically two two companies, Samsung and Hynix.
3:25 So, it's memory and semis. >> Right. >> he of course had a very large following. So, not only was his leverage on his $45 billion, let's say it was leveraged to 150 billion, but there was a lot of money piggybacking on his trade. So, I think in some ways you know, the unwind and even last week was due to a lot of funds being aware that he might have been in trouble.