John Authers Stocks in the U.S. look hugely expensive
This leg of the selloff has been led by the largest stocks which had previously proved immune, particularly the internet platform groups still generally known by the FANG moniker.
As I’ve mentioned often, stocks in the U.S. look hugely expensive by any metric that doesn’t take into account historically low interest rates, so it’s logical that stocks will fall as rates rise.
Those high valuations also mean that there’s potentially a long way to go down. What can we rely on to halt the decline?
Monday and Tuesday showed that there’s still a phalanx of investors ready to “buy the dip” at all times — but in aggregate they haven’t yet been able to stop a substantial drop and now seem to be ranged against “sell the bump” traders.
John Authers Bloomberg 26 January 2022
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