Tom Lee is Pleased with Today’s Fed Action, Doubles Down on Boolish Call for Major Rally

One of the more outspoken bulls on Wall Street, amidst a sea of rabble rousing curmudgeons, Tom Lee from Fundstrat Global (wtf is that?) is pleased with today’s events and those of the BOJ yesterday, doubling down on his bet that the S&P will hit 2,325 by year end.

“Investors were on the sidelines and now we’ve got the BoJ and Fed behind us and they’re essentially in line and somewhat friendly to markets,” Lee said. “This is going to result in investors putting money to work over the next few weeks.”

After being a bumbling fool for the past two years, calling for rallies that never materialized and missing the mark by 12% last year, Lee says his target, finally, is within range. His call, although bullish, is not exactly earth shattering. A move up to 2,325 is just 7.5% from current levels, entirely doable under the right conditions.

“The market is up year-to-date, the central banks aren’t changing what they’re going to do and the economy is holding up where it is,” Lee said. “It makes sense markets should be rallying. There are other factors that are supportive: the cost of credit, the consumer is in good shape.”

Lee expects earnings to play a big part in any rally. Analysts are predicting the fastest earnings expansion since the bull market began, according to data compiled by Bloomberg. Hitting those forecasts would require profits to rise by 13 percent next year, which Lee sees as doable.

“It’s not crazy,” he said. “Energy is really hammering earnings this year. If their margins just stabilize next year the math is kind of compelling. There aren’t many companies that need to stop losing money to do better next year. They don’t have to grow, they just have to stop losing money.”

In other words, Tom Lee is smoking crack. There has never been a time when earnings have grown by 13% with GDP flagging like it is. I am particularly amused by his low-bar expectations for the energy sector, completely ignoring their debt burdens and need to refinance, saying they don’t need to grow, per se, all they need to do is stop losing money.

How splendid.