stuart what are you gonna write about from monday im just curious how you take this odd bull market and drive it forward with a derivatives analysis you know its great great question good morning tom hopefully i get to pick my own exit music you know our view kind of coming into earnings season was basically the market was under invested because of what happened in september you know taylor went through some of the numbers have gotten some big deals across the board on s  p earnings and i think the markets are responding positively to that i think your question is the right one though once you get through these couple of big weeks earnings with the fed as a backdrop and whats going on on the rates market how does them how did the equity markets behave once earnings are behind us effectively and you know the last couple of quarters i think what weve seen is large cap in quality do great during earnings because theyre putting up those results once we get through you kind of get back into that value kind of race trade so that would sort of be our base case grade going to be read react do you see now when you synthesize your traditional research into derivatives a read you know i cant do the math jon youre october november december in january of next year are we going to be doing the same ballet were doing this morning i think januarys going to be very interesting because you know youre going to still have inflation accelerating i think a lot of people who are then going to be looking forward the next 12 to 24 months are going to be looking at a decelerating growth picture both earnings and gdp so i think early next year is definitely gonna be a tricky time for the markets as they try to balance whats probably we dont have inflation peaking till the end of q1 and then the outlook is for slower growth so i think that is going to be kind of a very tricky time for markets but i think to your end you know hopefully people just want to run it back and that would be our general general assumption at this point so lets talk about inflation and what it means when it peaks how high it will peak and then the trajectory of its fall at a time when earnings are beating because the demand is there even at these high prices whats your view you know inflations been a its been a tricky one you know both macro and micro i think coming into this quarter you know we we directed cost to really focus on stocks that had weaker pricing power and could be sort of the losers in the inflation story and we saw that a little bit in two q or some of the larger consumer staple stocks talked about inflation and their stocks made really large moves so i think theres a micro story here we have some stocks that can deal with the higher inflation in some stocks can and then you have a macro story which is i think big picture what is the path of inflation i think what were most concerned about is you know equities respond generally positive to inflation until it hits a certain level and for a lot of markets particularly large cap tech were starting to get to those levels where you know inflation starts to be a negative not a positive so you know you have a micro story on a macro story and obviously the market is trying to sort that out right now we saw it this is really important are you seeing were already at levels of inflation that will hurt big tech yes and in our frameworks the beta to real rates inflation for nasdaq and semis and some of those markets has already started to shift negative for s  p and also its positive but kind of closer to zero so yeah we do think there are parts of the market already that are you know not real happy with where inflation is right now how do you handle big tech the skewedness here i added it up the other day its like twenty four point six percent of spx now you know everybodys got their benefits stuart how do you handle that intellectually well you look at the all the mathematics youre dealing with i mean it takes a tough one we were bullish coming into earnings season you know as i mentioned you know big picture i think if you got an inflation surge you know tech is a part of the market from a macro perspective that is as i mentioned might be under some pressure i think the real hard question is if you get into early next year and inflation is high but growth is decelerating do investors want to go back and hide in tech again because you have those high margins in those really strong earnings or are they scared off by rates so you know i think from our perspective weve tried to you know be involved with tech when we think earnings are going to be reported and people are going to really focus on the strong fundamentals but in between earnings when folks are more focused on race and inflation weve sort of shied away from tech so its been a little bit of a whack a mole to some degree its just the biggest argument against what you just said in terms of inflation already hitting the point of big tax is the earnings that we just saw that absolutely did not show any sort of ramifications from higher inflation theyre still there and there frankly is a question that goes to what tom asked earlier about big companies doing much better than smaller companies able to consolidate able to pass along price increases that much more how do you counter those arguments when you say you know what weve already packed past the peak when it comes to inflation rates and big tech yeah look i think where people were more worried about inflation and rates relative to tech you know i dont think its as much a margin and earnings story i think it has a lot more to do evaluations and you know we could have a debate of whether large cap techs should be sensitive to rates where a valuation perspective but i think most investors look at it through that way so the question would be if your earnings are very strong starting to come off a little bit and youve got this strong recent inflation impact on on valuation from a negative perspective how do you balance that so again if youre thinking about a negative impact from inflation on tech ob i think through the valuation channel as opposed to earnings in margins