Stocks will be significantly higher by year-end, and high bond yields and inflation aren't as bad as they seem, Fundstrat says

• Stocks are still on track to end the year "significantly higher," Fundstrat's Tom Lee said.
• That comes despite a recent pullback, with equities closing September with the worst losses of the year.
• But yields are bound to come down eventually, Lee said, which is a positive for stocks.

Stocks are still bound to end the year "significantly higher" as surging bond yields are not sustainable, according to Fundstrat's head of research Tom Lee.

"Bottom line, we still expect stocks to be having a strong recovery once we get through this weakness. By year-end, I expect markets to be at a significantly higher level," Lee said in a video to Fundstrat clients on Wednesday. "The faster markets fall, the faster the recovery."