Is the U.S. stock market about to face a Wile E. Coyote-style fall?

Tesla electric cars are stationed in a storage area in the Zeebrugge port, northern Belgium, on June 21. Tesla reported a hefty drop in second-quarter profits due to the effect of price cuts while spending aggressively on artificial intelligence and other technology.Investors are beginning to wonder if they have turned into Wile E. Coyote. Like the cartoon character, they are suspended in mid-air, legs churning frantically. Maybe things will turn out all right.

Nvidia Corp., the most magnificent of them all, now trades for an awe-inspiring 67 times earnings, roughly three times the average price-to-earnings ratio for the market as a whole. Amazon.com Inc.and Tesla also boast nose-bleed valuations. Even the two relative bargains in the Magnificent Seven – Alphabet Inc. and Meta Platforms Inc.Optimists will tell you these lofty valuations aren’t necessarily a problem.

If this market rotation continues, small-cap stocks may finally get their day in the limelight. Still, it’s hard to see how the overall stock market can do well if the Magnificent Seven stocks encounter any bumps at all. In contrast to Capital Economics’ ebullience, Citigroup analysts see U.S. stocks inching up a mere 3 per cent over the coming 12 months.

To be sure, investors can see what they choose in the current crop of numbers. For all the dismal ISM results, the U.S. economy grew at a robust 2.8-per-cent annualized clip in the second quarter, according to data published this week.

Malaysia Malaysia Latest News, Malaysia Malaysia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Stock market today: Big Tech slumps after profits from Alphabet and Tesla fail to impressNEW YORK (AP) — Drops for Tesla and Google parent company Alphabet are dragging indexes lower after the Big Tech giants delivered earnings that failed to impress. The S&P 500 fell 1.
Source: SooToday - 🏆 8. / 85 Read more »

Stock market news today: Nasdaq sinks near 3% as Tesla, Alphabet earnings spark tech sell-offDisappointing Alphabet and Tesla earnings have stirred up worries that Big Tech's power to fuel stock market gains is fading.
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Stock market news today: Nasdaq sinks over 3% as Tesla, Alphabet triggered tech sell-offDisappointing Alphabet and Tesla earnings have stirred up worries that Big Tech's power to fuel stock market gains is fading.
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Stock market news today: US stocks slip ahead of Alphabet, Tesla resultsA marquee earnings day brings Big Tech results, in focus as investors assess the future of this year's rally.
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Stocks waiver, investors eye Tesla and Alphabet earnings: Yahoo FinanceUS Equities (^GSPC, ^DJI, ^IXIC) fell heading into the afternoon after briefly posting gains on Tuesday morning. Markets are wobbly after a slew of big...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

Expert says ‘a lot of updates’ needed from Tesla and Alphabet as earnings nearAs investors brace for earning reports from two of the “Magnificent Seven” tech giants -- Tesla and Alphabet -- one Wall Street expert says questions need to be answered about both companies’ priorities amidst the changing landscape of artificial intelligence.
Source: BNNBloomberg - 🏆 83. / 50 Read more »