Tom Lee (Fundstrat) - some thoughts on 2026
Here’s a concise summary of Tom’s 2026 outlook based on the transcript (targets + what he implies are the best places to be): - S&P 500 target: ~7,700 for 2026 (he frames it as a ~10% year, assuming the S&P ends the prior year around ~7,000). - Shape of 2026: Very turbulent—he repeatedly suggests it could feel like a bear market at some point (even referencing a potential ~20% drawdown), but finishes strong into year-end. Core volatility catalysts: - A new Fed chair (markets “test” the new chair; confirmation can take ~90 days). - Possible tariff turmoil if the Supreme Court overturns tariffs, creating policy uncertainty and business visibility issues. - Big bullish tailwind by year-end: the “Fed put” returning (and effectively a “White House put” too), with policy bias toward easing once the transition drama passes. - Leadership call: Tech/AI may stall/digest gains early, which can spook sentiment—but he thinks the market can still work if breadth improves (rotation rather than leadership ending). - “Best investments” implied (themes/areas): position for broadening beyond mega-cap tech—he highlights strength/response in small caps, equal-weight/broader market participation, and financials (and he wants housing + ISM to turn up as confirmation). - Key risk to watch: valuations + AI bubble fears + policy uncertainty—these can drive sharp swings even in a bullish year-end outcome.