The volatile stock market may have already bottomed out as jittery investors await the Federal Reserve’s interest-rate decision, says Tom Lee, founder of Fundstrat Global Advisors.
"Some things that you look for to say a bottom's in are usually small caps outperforming. They almost always turn up one day to two weeks before the actual bottom's in," he told CNBC. "Small caps bottomed versus the S&P on the 24th of August."
Lee, who launched his own boutique equity research firm, Fundstrat Global Advisors, last year after leaving JPMorgan as chief equity strategist, doesn’t expect the central bank to hike rates this week.
"I would be surprised if we had a hike this week," Lee said. "Investors between now and year-end want visibility. If the Fed does sort of put things on hold, I think they'd prefer to hear the Fed say, 'We won't really have the door open until next year,'" he said.
"In the last month, I think a lot of people who were bullish and buy the dips have now gone into this indecision camp," Lee said.
"There are bullish things developing though," such as signs of stabilization for the dollar and oil prices, he argued.
"Sentiment, which hasn't really mattered in the last month, is so bad that, I think, we're better-positioned for good news than bad," said Lee.
Though some in the market still think the Fed could act this week, the view that faltering global growth could push a move to the end of the year - or even into 2016 - is gathering steam, Reuters reported.
Some analysts suggest China's slower economy and turbulence in the financial markets might prompt the Fed to postpone raising rates for the first time since 2006. But the Fed's deputy chairman, Stanley Fischer, recently said he saw a "pretty strong case" for raising rates.
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