Wall Street wizard "denounces" Trump: Turning Liberation Day into "Massacre Day".

Tom Lee, co-founder and head of research at the financial market research firm Fundstrat, known as the "Wall Street Oracle," stated: President Trump's "Independence Day" is actually a "Massacre Day," much worse than what the market expected, but the panic has been exaggerated. Lee said, "We believe that the market anger generated is not a response to the trade war, but because White House policies have disrupted a core covenant of capitalism, namely a stable and predictable regulatory environment." He mentioned that companies have reacted to the betrayal of the stable regulatory framework essential for long-term investment, causing supply chains to struggle and capital dedicated to diversifying manufacturing businesses to be at risk. "Companies now face significant stranded capital, or lower capital returns," he added. "That being said, the downside risk for the stock market is too high, and the risk of a recession has been overestimated. Therefore, while we don't know when the stock market will bottom out... investors need to see a patient assessment of risks and rewards." However, Lee suggested that there are clear signs that the situation may ease in the next few days, with the EU expressing a desire to negotiate before taking retaliatory measures, and other countries seeking concessions from the House. Lee clarified that the actions of the White House do not signal a desire for a market crash. "While some believe recent measures have harmed Wall Street's interests to benefit the common people, this may be a misunderstanding." Furthermore, he believed that the likelihood of an economic recession is still low. "Due to significant mitigating measures to alleviate tariff impacts, the risk of an economic recession has been exaggerated," he said. "From a tactical standpoint, the market is severely oversold, and the time for a reversal is ripe." Lee cited his colleague and technical strategist Mark Newton, who noted that although the bottom has not been confirmed technically, the positioning is "severely undersold." The institution stated that the long/short net leverage ratio is at its lowest point since 2022, with a significant increase in short positions. Additionally, valuations have also compressed - with a 15x earnings in 2026, assuming a 15% decrease in earnings, it would be 17x. "Looking at statistical data, since 1950, a consecutive 4.5% decline has only happened four times, with each time showing a strong 12-month forward return," Lee said. "Participation is still low, with only 23% of stocks above the 200-day moving average, which historically signals a strong upward trend."