'Growth' stocks still not cheap, cautions JPMorgan

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Tech-dominated 'growth' stocks are still not cheap despite some sharp falls over the last six months, analysts at U.S. investment bank JPMorgan cautioned on Monday.

JPMorgan's analysts estimate that on average tech firms that are yet to even make a profit have lost 30% of their value since peaks around September last year, while 'fintech' firms which focus on tech-savvy banking apps and tools have dropped 40%.

Years of record-low rates have fuelled the tech stock rally but with those rates now rising again the appeal of stratospherically-valued tech stocks gets dimmer for investors, especially if their growth trajectories splutter. "Our fixed income strategists expect U.S. 10-year yields to reach 2.35% by the end of this year, and German 10-year yields to reach 0.5%." Treasury yields are now at 1.92% and Germany bunds are at 0.2%.

 

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