Tom Lee: S&P 500 Target of 6,600 Achievable, Bull Market Started April 7th

Market Outlook and Bull Market Call

• 🎯 Fundstrat's Tom Lee believes the S&P 500 reaching 6,600 is an achievable target, a goal that seemed more distant in February.
• 🚀 Lee posits that the market is at the start of a new bull market, not a late-cycle bull, with a potential start date of April 7th.
• 💡 The waterfall decline into April lows is seen as a significant reset of sentiment, leading to rapid deleveraging and a shift in investor positioning.
• 📈 Market tops typically require the ISM to remain above 50 for a sustained period, which has not occurred, supporting the bull market thesis.

Inflation Trends and Interest Rates

• 📉 Core inflation has defied expectations by trending lower, primarily due to housing and auto insurance costs now subtracting from inflation.
• ⚠️ Lee agrees with Waller's sentiment that core inflation is unlikely to turn up, even if goods prices increase.
• 🏦 A tight real rate environment (4.5% monetary policy vs. 2-2.5% core inflation) suggests a need for interest rate reductions if core inflation remains subdued.
• 📊 While US deficits are unsustainable, Lee notes that Japan has managed higher rates for extended periods without severe consequences, making the long end of the yield curve unpredictable.

Bitcoin's Trajectory and Long-Term Value

• ⚡ Bitcoin is consolidating after reaching an all-time high, responding to rising global liquidity and anticipation of a dovish Fed.
• 💰 With 95% of the world not owning Bitcoin and 95% of the supply mined, a significant demand-supply imbalance suggests substantial upside potential.
• 🚀 Lee reiterates his $150,000 to $250,000 target for Bitcoin this year, with a long-term network value potentially equaling gold's ($23 trillion) or exceeding it.
• 💰 A long-term valuation of $2.5 million per Bitcoin is proposed, considering its potential to surpass gold's market value and network effects.