The market sell-off will end up looking like a growth scare, says Fundstrat's Tom Lee

let's bring in Tom Lee managing partner head of research at fundr Global advisors as well as a CNBC contributor in times like this in the past it always would help to know uh Tom whether it's a a sharp scary Spike down which a lot of times uh the other side looks just like it or people are hoping for that so much that they don't see that it might have longer to go do you do you get the feeling that this is not going to be a major selloff uh for now I think it is the

former that you described you know we have over three days suddenly markets reverse and you know Japan down over 20% and as you're pointing out the NASDAQ could even you know decline further um declines like that are generally symmetric but you have to watch the vix and when the vix Peaks and starts to roll over and fall down the recovery can be just as quick I think a lot of this depends on whether Financial conditions in the US start to tighten you know meaning like do Market seize up but with interest rates falling um you

know the consumer still in pretty good shape I think on the other side of this it'll look like a growth scare but it doesn't mean that grow scare yes it's kind of uh interesting that it almost looks like the fed the Market's doing what the Fed didn't do again it's it's almost like once again they're they're there but not really ahead of what of what's happening and they're reacting not anticipating kind of I again yes on the way up and on the way down yeah the two years is signaling that the FED is behind um

because two-year yields have fallen further but it does seem like as we look back a lot more this is because of the surprise hike from Japan and the the the knock on effects from there if that is the primary source of the reaction I know it's going to be tumultuous for markets but for the US economy it's not necessarily bad news and I think that's why we can balance some of your your great and accurate calls have been based on um inflation coming in like you thought much cooler than the market was thinking at the

time I guess the flip side of that is that there can be a you know the Dual mandate there can be labor market weakness associated with why that's happening did is that was the asymmetric risk was it maybe it wasn't as maybe there was a great risk to to uh the job market well you know markets don't like surprise I mean Friday's jobs report was disappointing how far fact that they go with revisions down too it almost looked like the whole story the whole narrative that we had is is suspect about that's right and I

think many expected that because you know the establishment survey versus household had so many gaps um and so so that's kind of converging but that means markets are waiting until August payrolls report which is not for four more weeks uh to to really know but I i' would say to me it still seems like July even as a bad a report it was it's more of an aberration and I think the trend is still weather there there's a couple of things in it that people yeah there was uh almost a record number of people that

were having temporary layoffs and people who weren't working due to bad weather and Texas had a big spike in jobless claim so it does look like the hurricane had some effect although the BLS said there was no effect on Thursday night one of the people at your shop said 5390 looks like a good uh S&P support do support levels mean anything and can you want to give me another one or is it just another one to go through well uh you know because it didn't hold it means that there are other support levels that could

be important it might not old yeah it could not I think that the vix is telling us watch of vix yeah because it it spiked Friday and then it's spiking again today I mean we're the last time the vix was at this level was April 2020 so for an investor that tells us kind of where we are which is we know markets are nervous and they have to unwind but it's not been a bad time to be thinking that there is an big opportunity on the other side because once the vix starts to calm down

and markets have already corrected we know that there's opportun right knowing that of course it's August as you point out you think the Vick's High 40s is is where it's going to Peak or low 50s I guess you know it's up 100% almost the the vixs may not have a ceiling because we know next couple days there's also some geopolitical events on the horizon and Israel I and and Iran and you know we got politics here I mean that's escalating some people think well that's going to turn into a nightmare this weekly today I tomorrow

I mean we don't want to so I think that's why it's all coming to a head this week I mean to me it's it's a very important week cuz we know you it's hard to catch a falling knife as you're pointing out support levels are being broken but mortgage rates are falling the consumer's in pretty good shape and you know the job market I think it's very unlikely if the knife is falling and you want you're you like catching falling knives I know you so the question is at what point do you catch the said

knife I I spent a lot of time talking to Mark Newton our technical strategist over the weekend and I think that there is a reprieve coming this week like who knows it could even be today right we could open down huge and then after 11:00 a.m. we could reverse higher but I kind of agree with Joe that this is still August and I think that markets traction really doesn't come back till October so between now and October it's maybe a range bound Market at best but there'll still be opportunities and it's we could call it

bid Nvidia basically I mean it's just it might as well be in I mean Bitcoin what is bitcoin Gold's hitting new highs Bitcoin you know yields people look for safety they buy treasuries they buy gold people don't buy Bitcoin for safety yeah bit Bitcoin is still mostly a risk on asset and you know there's potentially been some lots of liquidations I think several hundred, accounts liquidated over the weekend