I think it's possible we get a relief rally led by tech, says Fundstrat's Tom Lee

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01. next guest says the fang trade can still work he's tom lee he's fun strat's head of research joins me here at post 9 and we'll get to that in a second it was a nice rebound by the way in the market led in part by that area but what do you make of that call top of our show today eric johnson says we're going to get a violent rally it's all going to happen in may and go 8 to 10 higher in the s p and it's going to be led probably by tech uh i mean the market is oversold and the timing makes sense because we've got a market nervous about fomc and the meetings this week and in a way i know you guys have said it the band-aid gets ripped off so could a relief rally happen 10 yeah i think it's very possible and i and i do think it'd be led by tech so okay you make a bullish call on fang at a time when some say the fang told bang acronyms dead and then you had all these companies report earnings and most of them reported slowing revenue growth so how how can i not be concerned about what the trajectory for the business looks like uh it's there's uh they're slowing because we pulled for demand from covet but we still have web 3.0 um and all these companies are really going to be center to that and then we have a labor shortage globally and the only way to cure shortages of labor is tech spend and fang are really the center piece of productivity so i think that the top line will surprise people for the next few years and again above gdp so in terms of all the air let's just say you know i know you've been bullish you admitted the other day that you were wrong you were too early in that call but if you do think that stocks are going up in the rank of where i want to be putting my money right now where does fang rank relative to some of the other areas be it defensives um eric was even positive positive on cyclicals yeah what do you think uh i i put fang at the top of the list because they've never one not nearly number one yes because they've derated we in our note today folk highlighted that faster growing companies today traded a discount to slow growing companies it's a complete inversion of what's logical and it only happened since november and i think as that normalizes that that means the fang could have the biggest moves interesting and how much do rates have to do with where they they go from here right that also is why this is a big week it's not just what the fed does in fact we pretty much know what they're gonna do it's what they say that matters most and where rates go we're at three percent on the tenure today that's right uh you know when it when i look at rates and i'm not a fixed income expert uh four fifty basis point hikes are already priced into the tenure and even in the two year in the five years so unless there's a hawkish surprise fundamentally that drives rates higher the bond market is sort of fairly priced and then the stock market then has to figure out what the right multiple is and and look at it a three percent tenure that's a 30 p e for a bond i don't think 16 p e for the s p or 11 times for facebook is demanding so i think stock multiples can actually expand this you know we've said that um milken's going on out in la and ken griffin was was speaking today and i mentioned some of his notes from earlier today uh talking about how powell's in such a very very you know very very difficult position is what he suggested that we're also at a time that he didn't use the word perilous and i'm sifting through my notes to find the exact word he used but nonetheless made the point that um you got to go back to the financial crisis to find another period where it was so uncertain in terms of everything that's going on not only here in the united states but but around the world we're in perhaps the the highest period of uncertainty is what he said since the great financial crisis what do you make of that uh agree with it disagree uh i might say march 2020 was more uncertain because people forget the fed uh stepped in but before march 2020 the market went into a huge panic we had a 37 decline in and many people expected the end of the world i think if there's any less than 2022 is that the market is prone to panic and panic quickly i think people are assuming the fed is going to break the economy or the markets but if inflationary suggests that they are yes or inflation can cool because financial you know in a way rates have moved in a way that have tightened financial conditions so the markets are doing a lot of the work for the fed right now and that way we don't have to break the economy or the markets but again i agree it's very uncertain but march 2020 was scarier and yet people are more bearish today than they were in march