Here Are Friday's Top Wall Street Analyst Research Calls: Applied Materials, Caterpillar, Home Depot, Microsoft, Shake Shack, StubHub and More

"The futures are trading lower to close out the week after a dreadful day on Wall Street on Thursday, during which all the major indices were hammered. Once again, as has been the case most of this week, the NASDAQ took the heaviest brunt of the selling, closing down an incredible 2.30% to close at 22,870. The Dow Jones Industrials, fresh off a new all-time high, closed down 1.65% at 47,457, while the S&P 500 was last seen at 6737, down 1.65%."

"By any measure, the market is extremely overbought, as the AI/Hyperscaler data center bubble has entered the stratosphere. Depending on the data used, the price-to-earnings multiple for the trailing S&P 500 earnings ranges from 28.18 to 31.18. The historical median is generally in the 17-18 range, while the historical average is around 19-20. This means the current P/E ratio, which is around 28-31, is significantly above the historical median, suggesting that the market is more expensive than usual by traditional valuation metrics."

"Somewhat surprisingly, yields were higher across the Treasury yield curve, as the move to a safe-haven represents a move to the ultimate haven: hard, cold cash. While nowhere near as dramatic as the equity meltdown on Thursday, it was surprising to see selling spill over to the Treasury complex. The 30-year bond finished the day at 4.72% while the benchmark 10-year bond closed trading at a 4.12% yield."

Futures moved lower after a severe Wall Street sell-off that hammered all major indices, with the NASDAQ down 2.30% to 22,870, the Dow down 1.65% to 47,457, and the S&P 500 down 1.65% to 6,737. The market has rallied sharply since April, with the S&P up about 43% and the NASDAQ up about 62%, leaving equities extremely overbought. Trailing S&P 500 price-to-earnings multiples range roughly 28.18–31.18 versus historical medians around 17–18 and averages near 19–20, implying notable valuation stretch and downside risk. Treasury yields unexpectedly rose across the curve, with the 30-year at 4.72% and the 10-year at 4.12%, and some theorized Treasury selling related to government shutdown settlement and stalled economic data that could delay a December rate cut. Oil and gas showed relative strength after a prior weak session.

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