Tom Lee Says Bearish Sentiment Mirrors 2008, But Performance Is A 'V-Shaped Rally' With S&P 500 Possibly Breaching 7,000 By Year End - Goldman Sachs Group (NYSE:GS)

Core Viewpoint - Tom Lee, chief investment officer of Fundstrat Capital, describes the 2025 market as "the most hated V-shaped rally," highlighting a significant level of investor pessimism despite the S&P 500's potential to reach 7,000 by year-end [1][4]. Investor Sentiment - Persistent negative investor sentiment is noted as a key anomaly, with recent AAII survey data indicating that bears outnumber bulls, a trend reminiscent of previous bear market years in 1990, 2008, and 2022 [2][3]. Market Performance - Despite the prevailing fear among investors, the market has risen by 13% year to date, which Lee characterizes as a "most hated V-shaped rally" [3][4]. Corporate Earnings - Resilient corporate earnings are a foundation for Lee's bullish outlook, with 84% of S&P 500 companies surpassing earnings estimates, particularly driven by strong results from major banks like JPMorgan Chase & Co. and Goldman Sachs Group Inc. [3][5]. Future Predictions - Lee predicts a "setup for a chase into year end," as under-invested players may be compelled to capitulate, reaffirming his S&P 500 target of at least 7,000, which he considers a conservative estimate [4][5]. Catalysts for Growth - Anticipated catalysts for the next 12 months include a potential Federal Reserve easing cycle, improved visibility in AI driving mega-cap earnings, and a recovery in the ISM manufacturing index, which has been in contraction for 32 months [5].