Tom Lee's Latest Insights: Fundstrat's Take on the Current Market (04/24/2025)

Tom Lee’s 3 Signals Confirm High Probability “Bottom Is In” & the Stocks Set to Lead  (YouTube link)

Tom Lee, CIO of Fundstrat Capital and portfolio manager of the US Large Cap Granny Shots ETF, provided a market update on 04/24/2025. 

Key points:

• Granny Shots ETF Performance (as of April 17th):
• Price: $17.46, NAV: $17.47, Total Assets: $826M.
• Weekly decline: -1.13%, outperforming S&P 500’s -1.49% by 36 basis points.
• Macro Environment:
• Markets turbulent since April 2nd ("Tariff Liberation Day"), causing uncertainty, worse than COVID-era volatility.
• Despite macro concerns (e.g., economic Armageddon fears, end of American exceptionalism, gold up 26%), Lee remains cautiously optimistic.
• Economy not unraveling; dry powder exists for a V-shaped stock rally, with potential new trade deals.
• Market Bottom Signals:
• Zweig Breadth Thrust (April 24th): Bullish reversal signal, historically leading to gains 1, 6, and 12 months later.
• High Yield Spreads Recovery (April 23rd): Spreads narrowed from 530 to 409 basis points, reducing recession risk.
• Two 90% Advancing Days (April 22nd): Strong market breadth, a bullish signal.
• VIX Drop: Closed below 31 after spiking above 50, marking an internal low.
• S&P 500 close to 50% recovery from its April 7th low (needs 5491, closed at 5485).
• Equity Market Outlook:
• Bullish signals outweigh macro fears; stocks likely in a bull market.
• Risks include tariff wars, global recession, deleveraging, or inflation spikes, but stocks appear "washed out."
• Positive developments: Tesla rose post-earnings, Bitcoin rebounding, Micro Strategy holding above lows.
• Granny Shots ETF Details:
• Top Performers: Netflix, Palantir, Micro Strategy, Abbott Labs, Costco.
• Bottom Performers: Microsoft, AMD, Amazon, Meta, Nvidia.
• Top Themes: Cybersecurity (led by Palantir), style tilt (quarterly adjusted), easing financial conditions.
• Granny Shots Strategy: Focuses on long-term themes (e.g., millennials, automation, cybersecurity) and stocks appearing in multiple themes (e.g., Google, Meta, Palantir, Nvidia). Named after Rick Barry’s underhanded free-throw style, emphasizing unconventional, high-success strategies.

Lee concludes that recent developments suggest a positive resolution for stocks, with the ETF well-positioned despite market volatility.