Market remains 'most hated V-shaped rally ever,' says Fundstrat's Tom Lee

Tariff Impact & Economic Outlook - The market believes tariffs aren't significantly impacting consumer spending or job growth yet, but inflation data is crucial for the Federal Reserve's decisions [2] - The market views the President's tariff statements as negotiation tactics, expecting a balanced resolution that avoids economic disruption [4][5] - Current tariffs are annualizing at 24% of $4 trillion, effectively neutralizing the current budget, but haven't negatively affected consumer confidence or S&P earnings [6] - There's a possibility of underestimating the real economic impact of tariffs, which could increase market volatility [8] Market Sentiment & Valuation - Some investors who missed the recent rally are skeptical, viewing the market as fully priced in [11][12] - The current rally is considered the most hated V-shaped rally ever, surpassing those of 2020 and 2022 [13] - S&P's median PE ratio is 15% lower than pre-COVID 2020 levels, suggesting the market is undervalued despite multiple "black swan" events [13] Earnings & Margins - Earnings estimates have decreased by nearly 50%, indicating contracting earnings [15] - Current tariff levels don't pose a margin risk due to offsetting factors like commodity deflation [15][16] - ISM (Institute for Supply Management) has been below 50 for a record 29 months, correlating with slower S&P forward growth [16][17]