Tom Lee, the head of research at Fundstrat, is known for his bullish calls, but lately he's been training his firepower on something else: the University of Michigan's consumer sentiment survey. In a recent appearance on the Meb Faber Show, Lee argued that the survey has become "notoriously partisan" and is giving investors a distorted view of the economy.

Lee reposted a clip from the show on X, highlighting a striking data point: about 25% of Democratic respondents believe inflation is currently running over 100%. Yes, 100%. That's not a typo. Meanwhile, Republican respondents are far less apocalyptic, with sentiment readings of 87 versus just 32 for Democrats. Lee pointed out that 51% of Democratic respondents are now below the survey's all-time "worst ever" reading of 47.6. That means more than half of Democrats are gloomier than the survey has ever seen — even during the worst of the pandemic or the financial crisis.

So what's going on? Lee argues the problem is structural. The University of Michigan used to conduct the survey by phone, but it's now online-only. And the response rate has shifted dramatically: roughly 66% of respondents are Democrats, while only 33% are Republicans. "That's not a fair breakdown of the U.S. overall," Lee said. He argued that the survey allows too much "latitude" in interpretation, and that the overall decline in sentiment is largely driven by the growing share of Democratic respondents, not by a genuine shift in economic conditions.

Lee's critique isn't just academic. He believes investors who rely on the Michigan survey to gauge consumer sentiment and inflation expectations have been consistently misled. The data, he says, has sent poor signals by overstating inflation expectations and weakening sentiment, even as the stock market has rallied. And rally it has: the S&P 500, tracked by the SPDR S&P 500 ETF Trust (SPY), is up 8.50% year-to-date, while the Nasdaq 100, mirrored by the Invesco QQQ Trust (QQQ), has surged 16.31%.

Despite the survey's grim reading — consumer sentiment hit a record low of 48.2 in May, down from April's record low and missing economists' expectations of 49.7 — Lee remains bullish. He believes the stock market has already bottomed and sees the S&P 500 reaching 7,300 this year, even with risks of an inflation shock and escalating geopolitical tensions. He points to the market's resilience during the Iran war and rising oil prices as evidence that stocks can hold firm and eventually return to record highs.

Lee isn't alone in his optimism. Ed Yardeni of Yardeni Research has also raised his year-end S&P 500 target to 8,250, suggesting that Wall Street pros are looking past the consumer gloom.

The next reading of the Michigan survey is due Friday, May 22, and it will be closely watched. But if Lee is right, investors might want to take it with a grain of salt — or at least adjust for the partisan skew.