On July 31, Caixin reported (Editor Huang Junzhi) that Tom Lee, co-founder and research director of Fundstrat Global Advisors, a U.S. investment institution, said on Tuesday that for the first time since 2009, there is a bullish signal and the rise of small-cap stocks in July is expected to continue. Lee explained that the latest Dallas-area manufacturing survey shows a significant shift in forward-looking expectations to positive. "It is worth noting that the situation is negative now, but forward-looking expectations have surged to +22. As you can see, this is the largest gap between forward-looking and current expectations since 2009," he said in a video. He further pointed out that the huge gap between current expectations and future expectations of the Dallas Manufacturing Survey has always appeared before significant fluctuations in small-cap stocks. "Look at what this means for small-cap stocks, because this is a cyclical survey. The last time this happened was at the bottom of the Russell 2000 index's sharp fluctuations in 2009." "If you look at examples with considerable differences, almost all of them appear before a significant increase in small-cap stocks, so I do think this is a buying signal, confirming that we are in the summer (Hershey time) of small-cap stocks." he added.

Lee explained that the latest Dallas-area manufacturing survey shows a significant shift in forward-looking expectations to positive.

"It is worth noting that the situation is negative now, but forward-looking expectations have surged to +22. As you can see, this is the largest gap between forward-looking and current expectations since 2009," he said in a video.

He further pointed out that the huge gap between current expectations and future expectations of the Dallas Manufacturing Survey has always appeared before significant fluctuations in small-cap stocks.

Tom Lee, known as the "Wall Street wizard", said: "See what this means for small-cap stocks, because this is a cyclical survey. The last time this happened was at the bottom of the Russell 2000 index's sharp fluctuations in 2009."

"If you look at examples with considerable differences, almost all of them appear before a significant increase in small-cap stocks, so I do think this is a buying signal, confirming that we are in the summer (Hershey time) of small-cap stocks." he added.

Last year, he was one of the few bulls on Wall Street and predicted that the S&P 500 would soar more than 20% to 4750 points in 2023 by the end of 2022. As expected, the index rose unexpectedly last year and the final price was only over thirty points away from his target point. According to reports, among the strategists tracked by Bloomberg, Lee's prediction was the closest, and he was jokingly called a "wizard" in the industry.

Prior to this, Lee also predicted that small-cap stocks may rise by 10% in August and may see a 40% increase by the end of September. His bullish view on small-cap stocks is mainly based on attractive valuations, continuously declining inflation and expectations of rate cuts later this year.

It is understood that compared with the component stocks that support the S&P 500 index, the component stocks of the Russell 2000 index are often more sensitive to interest rates. This poses a challenge to the index when interest rates rise, but when borrowing costs finally drop slightly, the index will rebound.

Lee previously said, "I think August will really be a month when rotation becomes more pronounced. I think small-cap stocks will strengthen and the S&P 500 may hold steady or only fall slightly."