The ever-bullish Tom Lee from Fundstrat made his appearance on The Compound Show this morning. He brings along some interesting data charts and some nuggets.
The hosts were interested to hear what he thinks about hedge fund manager David Tepper’s bomb on China, macro-economics and small caps.
Before we get into it, if you like the content put out, you can get it and more via my Telegram channels:
David Tepper’s “Buy Everything” Call on China
David Tepper’s interview here.
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14 min: Fundstrat will treat what is happening in China as a real move.
Technically, Mark Newton at Fundstrat sees many of the China companies approaching multi-year highs (KWEB and FXI ETFs). China’s government is trying to restore confidence, and equity is one channel. This is a little like the situation what ECB President Mario Draghi said in July 2012 about “whatever it takes” | Google Search here Imagine this in an environment where the US is also dovish.
Short interest in the FXI has been high and we are finally seeing a high in inflows into the ETF.
Macro Backdrop
Most people are looking at the macro backdrop and think this is late into a bull market but Tom says the data looks more like early cycle.
There is a huge gap between the different perception.
Housing, durable goods and transport have been in a recession. Most think that these are indicators of a recession and more to come but Tom Lee thinks the Fed turning dovish may change things.
Private investment as a percentage of GDP is 25% and we never been late-cycle until this is beyond 27%.
This slide shows interest rate loan products for various segments of the economy:
This slide shows how much
