‘It’s not a month to be a hero,’ warns stock-market strategist Tom Lee, after Dow logs worst day of 2021
July has given investors some fireworks. The Dow Jones Industrial Average DJIA,
“ ‘I think July overall is just a month of chop, and one where no one should really try to be a hero.’ ”
That is what the strategist told CNBC during a Monday interview, following a rout of the Dow, S&P 500 index SPX,
Lee told the business network that COVID cases rose last July and he’s expecting a similar pattern to unfold this year, even if it is a more transmissible COVID variant that is unsettling bullish sentiment. He acknowledges, however, that the market is being buffeted by uncertainty and that this month may be one where investors should avoid taking any additional big wagers.
Check out: Bond rally puts a 1% 10-year Treasury yield back in sight
“I just think that Julys, at least in my 30 years of doing research, have never been great months for people to really make big profits,” he said.
“For the next couple weeks, I think it’s tough,” he said.
“ ‘I think, again, the message that I would have [for investors] is [that] it’s not a month to be a hero.’ ”
Lee warned investors back in late June that when markets are strong in the first half of a year, July tends to be choppy.
That said, Lee is still bullish on equities in the longer term and maintains his 4,600 year-end target for the S&P 500. “I think that stocks are still going to have a double-digit second half,” he told CNBC Monday.
He said that investors “shouldn’t extrapolate that we’ve lost the war against COVID.”
To be sure, investors are also worried about rising tensions between the U.S. and China and the possibility that the market is likely to see peak earnings, and economic growth could peter out, setting the stage up for a lackluster 2022.
