Could the just-announced departure of Tom Lee, JPMorgan Chase & Co. (NYSE:JPM)’s notoriously bullish chief U.S. equity strategist, also coincide with the end of the Fed stimulus driven stock market bull run?
In CNBC interview this morning, Lee gave no indication of impending exit
Lee appeared on CNBC as early as yesterday morning and didn’t provide a clue as to his departure. Rather, he talked up the equity market as is his tendency. In the interview Lee said that a construction boom is coming and pent up demand is supporting the bull market.
“I don’t see why we should be worried about the short term noise,” Lee said. “We should focus on the fact we are in a bull market.”
Lee said he sees momentum from lower oil costs and improving weather helping stocks, and said investors could even look toward stocks that have received short attention.
Lee cites bonds to check growth, but overlooks default risk premium
One measure investors can check to see whether growth could slow to recession-like levels is the long-term yield curve on 10-year Treasury notes and 30-year Treasury bonds, Lee said, forgetting that some bond investors are weighting the risk of default as one reason why rates might rise. Lee was optimistic regarding the prospects for a recession. With modest growth expected this year and employment improving, he said, the U.S. does not seem close to falling into another recession.
Had been right during 15 year bull run as markets witnessed historic monetary expansion
Lee had been right much of the time during his 15 year tenure, as he caught a major run in Federal Reserve and government policy for increased spending. However, as the Fed begins to taper, a delicate operation at best, the bull case for stocks might be more difficult to make.
According to early reports Lee is leaving the bank and has no immediate plans.