We have to take it one day at a time. At 8.7% from the January peak, we are still within a tier-one drawdown. If this stays relatively contained, short duration, sentiment indicators like AAII are at minus one to two standard deviations—that's enough. But if we have a more extended conflict and it becomes a growth shock, that could take us into tier-two drawdown territory.

Most clients are in the 'this will create inflationary pressures' camp. Companies are still talking about resilience, ability to work around things. A few are adjusting for fuel costs, but not a lot. Towards the end of last week, I started getting questions about growth impact.

One client asked if the U.S. can stay immune from what's happening in Europe and Asia, and thought the conflict would go on a few months—the only person last week who said that.

I don't think we are being complacent. People are fishing around for trades, hedging activity has been put on. The bottom-up S&P 500 EPS forecast has increased to $323, up $3 last week. The S&P bottom-up PE has come down from 28x last fall to around 21x now. It's not a washout yet because you're not at the average (18.5x).

Nobody in my meetings is looking for rate hikes. We are much more sensitive to 10-year yields. We worsened one stress test, taking 10-year yields up to 5%—that tends to be the number that spooks equity investors.

With five flavors of earnings stress tests, I get a range of 5700 to 7400 for the S&P. The 10-year yield is a key variable; the lower it is, the better for the multiple.

The U.S. had lost its valuation premium heading into this crisis. Earnings are still strong in mega-cap growth. Tech is driving the earnings growth. If you want to push the market into negative territory sustainably, you have to attack tech earnings.