Tom Lee Predicts 100% Growth for Small-Caps

Tom Lee, head of research at Fundstrat, predicts significant upside for small-cap stocks under President-elect Donald Trump's administration, suggesting they could double in value over the next two years. He attributes this optimism to expectations of a new economic agenda, tax cuts, and relaxed regulations, with small-caps currently trading at lower valuations compared to the S&P 500. Recent market reactions indicate a surge in stocks following Trump's election victory, although concerns about inflation and a rising budget deficit persist. In contrast, Indian markets have faced volatility, with small-cap indices underperforming due to weak Q2 earnings and ongoing foreign institutional investor selling. Despite this, Lee maintains a bullish outlook for small-caps and broader equity markets, forecasting potential gains for the S&P 500 and Bitcoin as well. However, he cautions that addressing macroeconomic challenges remains a complex issue for the incoming administration.