Tom Lee, head of research at Fundstrat Global Advisors, who successfully predicted the bull run in stocks this year is now warning of a 10% market correction.
Appearing on CNBC, Lee, who is widely viewed as a top Wall Street analyst, said he thinks stocks will experience a 7% to 10% pullback during September and October of this year.
A market correction is defined as a 10% decline from recent highs.
“Investors should be cautious for the next eight weeks,” said Lee. “We have the September (interest rate) cut and we have the election, things that will get people nervous.”
However, Lee, who is known for being bullish on equities, said that investors should view the decline over the next two months as a “buy-the-dip” opportunity.
Lee’s comments come as U.S. markets began September with a major selloff that saw the blue-chip Dow Jones Industrial Average lose more than 600 points and the tech-heavy Nasdaq index fall 3%.
In speaking on CNBC, Lee reminded investors that September is historically the worst month for the U.S. stock market, and that October is typically a volatile month for trading as well.
Lee’s comments about the current state of the American market come ahead of an expected interest rate cut by the U.S. Federal Reserve at its next meeting on Sept. 18.
The U.S. central bank is widely expected to lower interest rates for the first time since the onset of the Covid-19 pandemic in 2020.
