Magnificent Seven tech stocks haven't been this cheap in six years, Goldman Sachs strategists say

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The top megacap stocks haven't been this cheap in six years.

The Federal Reserve may be wrong, but at least officials there won’t be flying blind now that the government will stay open, keeping the nation’s flow of economic data still running. In the early going, there was something of a relief rally, though it quickly evaporated.

Put a different way, the largest tech stocks trade on the cheapest valuation relative to the median stock in over six years, the strategists say. The Magnificent Seven trade at 1.3 times their PEG ratio , versus 1.9 for the median S&P 500 stock. That discount, the strategists say, has been reached only five times in the last decade. As recently as January, they traded on an 18% premium in PEG terms.

The markets U.S. stock futures ES00, NQ00, +0.19% were flat, after the S&P 500 SPX fell 3.7% last quarter. The yield on the 10-year Treasury BX:TMUBMUSD10Y reached 4.63%. Que sera, sera. Fed Chair Jerome Powell is due to speak at a York, Pa. roundtable with Philadelphia Fed President Patrick Harker, according to reports. The Fed’s calendar has Vice Chair for Supervision Michael Barr speaking on monetary policy and financial stability.Random reads Does China’s property bust make a financial crisis inevitable?Why frequent-flier miles are no longer worth bothering with.The chart Peter Tschir of Academy Securities said smart borrowers have made Fed policy laggier.

 

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