"Fortune's Shawn Tully points out that the S&P 500's price-to-earnings ratio just hit 30, which often signals impending doom. "A PE of 30 means big cap stocks are really, really expensive by historical standards. It also signals that from these heights, the chance for big returns going forward over any extended period are low, and the risks of a sharp 'reversion to the mean' downdraft is far more likely," he wrote on Tuesday."
"The S&P 500 sank for a second straight day yesterday but no one's complaining-it is still up nearly 13% year-to-date. Futures are also marginally down this morning, premarket, suggesting that investors aren't expecting too much drama in stocks today. The U.S. Federal Reserve has signalled that further interest rate cuts are likely on the way-and new cheap money will be good for stocks in the future."
""For stocks, history suggests that the path ahead is likely higher, based on previous instances when the Fed cut rates when stocks were trading near or at record highs," Adam Turnquist, chief technical strategist for LPL Financial in Charlotte, N.C., told clients in a note seen by Fortune this morning. "From a technical perspective, it is hard to argue with a bull market that is making new highs and powered by cyclical leadership. However, building overbought conditions paired with d"
U.S. stocks fell for a second consecutive day while futures were marginally down premarket. The S&P 500 remains up nearly 13% year-to-date despite recent dips. The Federal Reserve has signalled additional interest-rate cuts, which would lower borrowing costs and support equity prices. The S&P 500's price-to-earnings ratio reached about 30, reflecting historically high valuations and raising the risk of mean-reversion. Market gains are concentrated in a handful of technology companies, creating overbought conditions even as technical indicators show new highs and cyclical leadership.
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