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Well, tech stocks are surging off the back of the Fed's decision to slash rates by 50 basis points. The Nasdaq leading all three major averages higher, up over 2% here in early trading. The stocks leading those gains, a lot of it's being led by the MAG 7 names. Nvidia, Meta, Microsoft, Tesla among the names soaring to the upside here today. So here the outlook for the tech trade is reaction to the Fed's decision. We want to bring in Scott Croner, and he is the head of US equity strategy at City. Scott, it's great to have you. So, looks like the market at least looking at this, the decision yesterday, some of Powell's commentary, saying it makes a lot of sense to be a risk-on sort of sentiment right now. What do you think?

Well, Shauna, I think it's it's a it's a buy the news, sell the news of reaction to the Fed. If you go back and step back and look at how we've gotten to where we are with the S&P thus far this quarter, the leadership this quarter has really been those areas of the market that are perceived beneficiaries of lower rates. So, real estate, utilities, even the homebuilder ETFs have been have been hitting recent highs. In the meantime, tech is still lagging where it was last time the index was through 5600. So, I think essentially what you're having here with given somewhat of a backup in, as you point out, in two and 10-year yields, is that a bit of a profit taking on the news in those areas that have been perceived as rate sensitive, um, and at the same time a catch-up move in that mega cap growth cohort that ultimately ultimately does benefit from lower interest rates, but has been a relative laggard thus far this quarter. All told, what you've got is an index moving higher. We'd argue it's it's more or less, you know, near our fair value, um, target, which is 5600. So, we'll have to watch how this goes, but I I do think there's a a tale of a couple different markets underway today.

Well, let's talk about the tale for the magnificent seven. In reading your notes, Scott, I'm considering whether or not I'm going to start not saying that phrase moving forward as a market's anchor. You said to turn to a barbell approach incorporating MAG 7 along with some other investment opportunities. Talk to me a little bit more about that.

So, I think, yeah, we've been saying for some time, the MAG 7, I get it. It's it's a it's a great, you know, description of this cohort of companies, but we've been arguing for the better part of this year that they're becoming more idiosyncratic in their behavior, okay? So, that's the starting point. What we're getting at is that when you look at some of the key leaders, and in particular Nvidia on on this, we get it. You've got three names that are 6% plus of the index, Nvidia, Apple, Microsoft. Those companies are going to be important to index price action, and I think you're seeing that today. But what we're focused on from this barbell angle is we want to be holders of those. But when you look at the rate of increase in this and forward year earnings expectations, it's been a stair-step function for over a year now. It's beginning to decelerate though. Essentially, what we're arguing is that growth projections are strong, 40% for Nvidia next year, 20% for the rest of the MAG 7. That's something that you have to recognize, appreciate, and and respect, and that kind of augurs to, we want to be holders of these names. But the lift in terms of getting a more material upside to projections from here needed to make these names still the serious outperformers is getting more difficult. In the meantime, as we go down cap into, let's call it, mid-cap tech, if you will, we're finding a more attractive setup. Many companies that play to this broader AI AI implementation theme that have a less onerous implied growth expectation, still strong consensus earnings growth, and therefore we think the setup for a catch-up move, call it or broadening within tech, is a really important and interesting way to think about playing this broader trend going forward.