this weekend a year ago the nasdaq composite hit a record high and why not the fed funds rate was then effectively zero while the central bank continued to buy assets pumping liquidity into the market inflation fed chair jay powell insisted was “transitory” it was not powell has raised the cost of borrowing to a top of range 4 he’s now selling back lots of bonds so the nasdaq comp is off 306 from that peak where to now can the recent rally propelled by indications of cooling inflation be sustained well many traders seem wary about betting on any traditional festive surge as shown by some funny stuff going on in options markets the cboe equity putcall ratio jumping to 146 midweek way above even the 13 registered during the market turmoil in march 2020 and an indication traders were eagerly seeking protection from a market fall  the next day the ratio fell back to 073 however but it’s friday so let’s take the positive from this a spiking putcall ratio is often seen as a contrarian indicator a sign investors are too pessimistic in fact if we’re embracing such optimism let’s go the whole hog and seek out the latest thoughts of tom lee the analyst for whom “the glass half full” would be the name of his pub lee head of research at fundstrat in a note published late thursday reiterates a batch of reasons why stocks can rally from here first the cooling october consumer prices figure was a “game changer” because it was repeatable with softening in three important areas shelter medical care and goods like apparel and used cars “we expect this to be sufficient for fed to slow pace of hikes and possibly december 2022 may be the last hike” says lee second the recent sharp move lower in 10year treasury yields tmubmusd10y likely portend further declines which in turn are supportive of the expansion of stocks’ pe multiples indeed the calmer conditions in bond markets of late as measured by the cboe 20year treasury bond volatility etf vxtlt is also helping support equities the vxtlt has dropped from 33 to 23 in just four weeks and “this collapse in volatility in our view would support sp 500 surging to 44004500 before year end” says lee next the dollar index’s swift 65 retreat from the 20year high touched in late september speaks to easing market tensions and provides a more hospitable environment for us corporate earnings lee has also taken comfort from the fact that the stock market has shown little evidence of being derailed by the ftx implosion with few signs of crypto contagion affects despite “300000 accounts with leverage and the stranding of 10 billion or more in assets” “this shows that investors are becoming more discerning rather than ‘hit the sell button’ on any bad news” finally lee challenges the view that investors will turn attention away from monetary policy and start to fret about how much a slowing economy will impact company earnings “skeptics will say ‘growth is the problem now’ and point to downside in earnings per share but the sp 500 has historically bottomed 1112 months before eps troughs” stocks were set to open higher on friday with the sp 500 future es00 up 06 to 3978 tenyear treasury yields tmubmusd10y rose 26 basis points to 3797 as investors continued to absorb a suggestion from a fed official that interest rates could rise to 7 us crude futures cl1 were little changed at 8161 a barrel shares in palo alto networks panw are up 8 in premarket trading after the cybersecurity company delivered wellreceived results and gave an upbeat outlook after thursday’s closing bell in contrast williamssonoma stock wsm are losing 7 after the homeware retailer warned of macro uncertainty impacting sales in coming years twitter workers quit offices shuttered amid “hardcore” uproar on the conditions laid out by elon musk shares in one of musk’s other ventures tesla tsla  rose in premarket trade boston fed president susan collins is due to talk about the labor market at 840 am economic data on friday include the october existing homes report and leading economic indicators both due at 10 am further signs that the crypto bros are not minded to look after their own as binance boss changpeng zhou continues to tear into sam bankmanfried former leader of collapsed ftx germany’s biggest trade union has agreed an 85 pay rise in the wake of record high inflation sweden said traces of explosive have ben found at the site of two pipelines that used to carry gas from russia to central europe qatar got the world cup because it said it would hold it in the summer with beer now it’s taking place in the winter without beer best of the web the meltdown in crypto is not just the fault of ftx all the equity bulls want a fed pivot but what would that really mean for stocks after any initial euphoric pop well given fed speakers keep saying they will squeeze inflation until the economic pips squeak it may mean that by the time the fed is considering easing off the brake the environment for businesses already could be particularly grim the chart below from pictet asset management via chartstorm shows how sp 500 earnings per share are impacted during periods when fed tightening is accelerating and decelerating message to market when the fed finally gives you what you craved you may wish you weren’t getting it here were the most active stockmarket tickers on marketwatch as of 6 am eastern sheep going round in circles – for 12 days a 50 mug is the new office status symbol no really need to know starts early and is updated until the opening bell but sign up here to get it delivered once to your email box the emailed version will be sent out at about 730 am eastern listen to the best new ideas in money podcast with marketwatch reporter charles passy and economist stephanie kelton