Fundstrat
Fundstrat's Tom Lee: November Rally Could Push S&P Toward 7,500
11/3/2025, 4:12:07 PM
Economic Summary
- Market has rallied six months in a row — a rare occurrence — and seasonality plus momentum could drive strong November gains (Tom Lee called 200–250 S&P points).
- Sentiment indicators (AII ~ -11.5) remain bearish even as equities are up ~17%, implying a performance chase and latent bullish flows into public stocks.
- Inflation metrics appear to be easing faster than expected: 'trueflation' sub-2%, shelter component weakening, and 54% of CPI components deflating, which would materially lower core inflation.
- Fed liquidity operations (repo) have picked up, likely reflecting month-end and shutdown effects, but calm high-yield spreads suggest minimal bank stress currently.
- AI-related productivity appears to be expanding corporate profit margins despite tariffs, supporting earnings growth even amid macro uncertainty.
- Private markets (private credit, venture, private equity) and many fund managers have delivered disappointing returns, creating divergence between public and private performance.
Bullish
- Core inflation appears to be falling quickly, with shelter moderating — could prompt Fed cuts and lift markets.
- AI-driven productivity gains are boosting corporate profits and margins despite tariffs.
- Underperformance by many fund managers is prompting a performance chase into public equities.
- Crypto fundamentals (stablecoin volumes and application revenues) are strong, supporting year-end BTC/ETH rallies.
- Repo operations are typical month-end flows and calm high‑yield spreads suggest limited systemic bank stress.
Bearish
- Hawkish Fed comments (Powell) or signals could trigger short-term market wobble and volatility.
- Private markets and private credit are underperforming, suggesting liquidity or returns stress outside public markets.
- Speculative, non‑profitable tech leading gains raises risk of a sharp correction if sentiment reverses.
- Housing/shelter weakness could depress homebuilders, regional banks, and consumer cyclicals.
- Recent massive crypto liquidation increases short-term downside risk for BTC and ETH prices.
Bullish tickers
BTCETHBAC
Bearish tickers
BTCFTXHOUSING
BTC
2 price targets
150200
Bullish
Fundamentals improving — exploding stablecoin volumes and rising application revenues — supporting a year-end rally to $150–$200.
Bearish
Recent historic liquidation (around October 10) caused major price shock; consolidation could prolong downside pressure.
ETH
1 price targets
7000
Bullish
Strong fundamentals with rising stablecoin volumes and app revenues; Tom Lee suggested a potential move toward 7000.
Bearish
Vulnerable to broader crypto market liquidations and short-term consolidation after recent shocks.
BAC
Bullish
High private client equity exposures at Bank of America indicate strong retail positioning and engagement in the rally.
Bearish
Regional bank and housing weakness could pressure banks indirectly through asset quality and mortgage-related activity.
FTX
Bearish
Referenced as part of past crypto turmoil; used as a benchmark for the severity of the October liquidation event.
HOUSING
Bearish
Shelter component cracking and housing troubles could weigh on homebuilders, consumer cyclicals, and regional banks.
People mentioned
Tom LeeJerome PowellMike SantoliAndrew