Tom Lee, a cofounder of Fundstrat Global Advisors with a solid track record of stock market projections, believes that the stock market’s path during the Cuban Missile Crisis may serve as a model for how investors would react to President Donald Trump’s impending retaliatory tariffs.
As investors prepare for President Donald Trump’s next round of tariffs, a pervasive feeling of fear has descended over them. However, a leading Wall Street analyst said that the Cuban Missile Crisis may provide a path for a massive recovery.
Tom Lee, creator of Fundstrat Global Advisors, who has a solid track record of making stock market predictions recently, told CNBC on Friday that his clients However, Trump’s indication that he would have “flexibility” in implementing his reciprocal tariffs, which are due on April 2, may point to a less harsh strategy that might trigger some relief.
With these tariffs, Lee said, “it seems like we could actually have a positive-case scenario that is either mutually agreed upon or if it is reciprocal maybe a good deal for businesses.” Additionally, I believe it would pave the way for a much larger rebound rally than we had anticipated.
He made a comparison between the current state of affairs and the Cuban Missile Crisis, which almost led to a nuclear exchange between the US and the Soviet Union.
Following their separate agreements to remove nuclear weapons from Cuba and Turkey, President John F. Kennedy and Soviet leader Nikita Khrushchev ultimately ended the Cold War stalemate.
Lee noted that the US stock market recovered the majority of its losses prior to the real settlement, having plummeted seven days into the two-week crisis in October 1962. He said, “I believe that’s a good template for today.”
Bloomberg said this weekend that they are looking more targeted than a broad, worldwide assault, which might provide some respite from retaliatory tariffs.
In the meanwhile, prominent Wall Street investors, like Cathie Wood, are warning of a recession. However, Lee contended that the market isn’t indicating one, claiming that investors are more paralysed than pessimistic and that a significant stock rise on April 2 would even assist prevent a decline.
“If this trade deal is approved, it could essentially blunt this whole issue of trade in the future,” he said. “That’s one of the things that we have to keep in mind.” “And in fact, it would restore the US’s appeal.”
Lee had a similarly optimistic prediction for the stock market earlier this month, forecasting a 10%–15% increase this spring after indices entered correction zone due to concerns that growth will be stifled by an intensifying trade war.
next his forecast, stocks continued to decline over the next several days, although they have since made a little recovery.
are anticipating harsh tariffs that will cause recessions in a number of countries.