Technical signals suggest downside is limitedThere isn't much evidence that poor-performing areas of the market, like small-cap stocks, have peaked, Newton said.
Meanwhile, Treasury yields have fallen in recent months as traders anticipate Fed rate cuts, which is typically bullish for stocks, he added.
Advertisement"Thus, looking to buy dips makes sense technically," he said, adding that small-cap stocks looked "certainly appealing" after their recent slide.
Fed rate cuts will mark a turning point in the marketThat's because rate cuts are expected to ease borrowing costs across several sectors.
Small-cap stocks are flashing bullish signalsThe Russell 2000 hit a 30-month high in July, something that's only happened nine times over the past 45 years.
Persons:
Fundstrat's Tom Lee, Lee, —, Tom Lee, who's, Mark Newton, Newton, I'm, Russell, That's
Organizations:
Tech, Service, Fed, Wall Street
Locations:
Wall