2 hours ago
CNBC Pro: The “Hindenburg Omen” happened last week
Investors are concerned about the health of the rally after major indexes hit new record highs without widespread participation, but one expert says tight trading ranges don’t necessarily mean markets are weak.
“When you look at the market, I think the market still looks healthy because the big names still look very healthy,” said JC O’Hara, chief technical strategist at Ross MKM, who pointed to Nvidia’s 6% gain on Tuesday as an example.
“If that has a significant impact on the index, then I think the index is fine, but for stock pickers, it just narrows the pool of potential candidates that could be great buying opportunities,” he said.
CNBC Pro subscribers can read the full story here.
Sarah Min
2 hours ago
Morgan Stanley Wealth Management says the market is priced for perfection.
The problem is that the market is “priced on perfection.”
That’s the view expressed by Morgan Stanley Wealth Management in a 15-page report released Tuesday by chief investment officer Lisa Charette.
Even if inflation and interest rates fall, the floor would be “well above recent cyclical lows, yet this scenario is barely reflected in current market prices,” according to the report. “With above-average uncertainty, market pricing assuming perfection, historically high valuations, and apparent investor complacency, we are focused on risk-adjusted returns and have little interest in taking duration in stocks or bonds at this time,” Morgan Stanley’s wealth services unit wrote.
Stocks have risen to all-time highs, largely due to rising price-to-earnings ratios that investors are willing to pay, “despite increasing uncertainty about economic trends, potential policy responses, and the upcoming presidential election.”
The market is expensive, Charette writes. “Forward price-to-earnings multiples are in the 90th percentile over the past 100 years.” The S&P 500’s forward price-to-earnings multiple of 21 is “one of the highest forward multiples in the past 35 years and matches its 2021 high.” [and] “It’s approaching the all-time highs seen during the dot-com bubble,” she wrote.
Scott Schnipper
2 hours ago
NVIDIA is $1 Trillion Bigger than the Entire S&P Energy Index
Want to know just how big Nvidia has gotten? Let me put it this way: The chipmaker’s $2.802 trillion market cap is more than $1 trillion larger than the market cap of the entire energy sector of the S&P 500. If you add up the market caps of each stock in the sector, it’s worth about $1.767 trillion.
Nvidia surged 6.98% on Tuesday, setting a new record and building on a surge from last week. The company’s shares are up 130% this year, including more than 31% this month alone.
See the chart…
NVDA Year to Date
2 hours ago
Shares were little changed on Tuesday evening.
Stock futures were mixed on Tuesday evening.
Futures for the 30-stock Dow fell 34 points, or about 0.1%, while S&P 500 futures were down 0.03% and Nasdaq 100 futures were up 0.03%.
Pia Singh
