Tom Lee: The S&P 500 will rise to 7300 points, and the surge in market liquidity may be explosive.

On December 2, Tom Lee stated on CNBC's “Squawk Box” that the S&P 500 index is ready for the year-end “liquidity rise,” claiming that “7200-7300 points” is not a wishful thinking but rather “a target likely to be achieved in December.” To ensure clarity in his tone, he provided the most direct summary of his position: “I am very bullish.” Lee believes that traders are ignoring three major factors—liquidity, capitulation selling, and time windows—as if in a trance. Lee pointed out that the biggest single tailwind for the market has arrived: “Now is the moment when quantitative tightening (QT) ends.” With the Fed preparing to cut rates this month and balance sheet tightening stopping after nearly three years, he believes the surge in liquidity could be explosive. Lee stated that in closed-door meetings, institutional sentiment has collapsed, and many fund managers have “raised their hands in capitulation,” hoping to muddle through to January. Now, if December performs strongly, he expects a wave of buying to avoid the career-threatening consequences of underperformance, which is classic “performance chasing” behavior, potentially triggering a stunning big pump in the broad market ETFs.