00:00Julian Emanuel of Evercore writing, it is very clear that the investing public's love affair with tech stocks is in
00:05full bloom, driven by exceptional earnings and reasonable valuations.
00:10Julian joins us now for more. Julian, good morning.
00:12Good morning.
00:13Let's talk about the 99 vibes. The 99 vibes are one thing, but when you write that last line there
00:18about valuations and earnings, how different is this moment to then?
00:23Well, that's the biggest contrast, OK, because back then everything was a much more speculative in terms of the valuations.
00:32And look, if we go back to the benchmark of the last three years, stocks are higher valuation wise.
00:38But the thing about the last number of months, particularly in the Nasdaq, is the earning strength has been so
00:45intense that valuations have actually started catching up to earnings.
00:51And so for us, what's really happened and also in consideration of the fact at the end of last year,
00:57there was a decided dislike of technology, which really pivoted at the March 30th low.
01:05But in a lot of ways, tech has become value.
01:08There was the itch to rotate, the itch to rotate. And now the big complaint is the breath is bad.
01:12The breath is terrible.
01:13Can you see a picture ahead of you where this resolves bullishly?
01:17Well, look, so and the contra to that was if you go back to the beginning of the year, there
01:25was a belief that the halo trade would be enough to take the indices higher without tech participating.
01:31That was debunked. The math tells you that at 55 percent, you know, tech and NAI exposure in the index,
01:39you need that.
01:40And so there certainly is a case for medium term bullishness.
01:45But again, like everything else, this too shall pass. We just don't think you're you're anywhere near that time yet.
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