Despite the stock market’s recent corrective movements in August, hedge fund veteran Tom Lee remains optimistic about its future.

In a recent CNBC interview, the managing partner of Fundstrat Global Advisors stated that his company believes equities are currently forming a bottom for the month.

August has been difficult for equities

Lee also noted several macro factors that seem to be favoring the stock market, such as the reversal of the dollar’s sharp decline and the decrease in yields, both of which would have a positive impact on stocks.

Although August has been a difficult month for equities, Lee cites a strong jobs report and is hopeful for a good consumer price index report this week, which he believes will lead to improved stock performance.

The CPI is typically used as a proxy to track inflation rates. Traders keep a close eye on the metric as it could potentially signal whether the Fed would continue to raise interest rates.

Lee, a Fundstrat executive, has observed that institutional investors are showing a tendency to become bearish on the stock market after the recent correction.

This indicates that the stock market is not yet showing signs of euphoria, as there are trillions of dollars still waiting on the sidelines.

Lee is surprised by the number of institutional investor clients that have started betting against stocks rising in the last four days.

Although there are some technical reasons to be bearish in August, Lee believes that people are too quick to turn bearish, which is not a sign of a thriving market. Instead, this is showing the fact that people are getting pulled in, and there is still $5.5 trillion of cash waiting to be invested.

Stay tuned for more news and make sure to check out the latest figures in the markets as well.

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