Enthusiasm for bullish job data seems to have faded a bit, as stock futures slide and investors are looking for the next catalyst to boost this market. And at the same time we’ve seen this year, the technology is heading south.
The investment director of the Bahnsen group, David Bahnsen, believes that the markets are in the middle of a technological setback, not heading towards a “sudden and shocking fall of 30%, 40%, 50%, but that we get to a point, empirically and demonstratively, this requires a new pricing. “
In ours call of the day, Bahnsen explains to MarketWatch that investors could be blind to the valuation risks of certain high-profile stocks, as price / earnings ratios have not been corrected to anything “normal or reasonable”.
“
“There’s not enough momentum, there aren’t enough buyers right now who can stand that level of valuation.”
”
It stretches a bit of history as a guide to what can happen.
Microsoft MSFT,
it took 16 years to make new highs and Cisco CSCO,
it is not even close to its all-time high in 1999. “Intel INTC,
it’s basically right where it was in 1999, and yet the three companies crushed it over the last 20 years, increasing their double-digit revenue per year for 20 years, ”he said. “If stock prices did not move, this can only happen for one reason. Stocks were too damn good. ”
The message of stocks that investors now like: the popular FAANG (Facebook FB,
Apple AAPL,
Amazon AMZN,
Netflix NFLX,
Google GOOGL Alphabet Owned
) names and companies like Tesla TSLA,
– is that they can continue to grow and be successful and be profitable, although valuations can be normalized and stock prices “can’t go anywhere for a long time,” Bahnsen warned.
One solution: look at old technicians like IBM IBM,
Cisco CSCO,
and Intel INTC,
“They are literally stable cash flow generators that have buying options on their future,” he said. “They have exciting new technologies that aren’t on Netflix NFLX,
and Facebook FB,
camp and certainly not the Tesla and the Snowflake SNOW,
although none of these companies can do anything without Intel’s processors, chips, servers, mainframe and hardware. ”
“The technology infrastructure we still need depends on Cisco, Intel and IBM,” he said, adding that patient investors who expect these shares to be paid slowly are still receiving decent dividends.
Bahnsen is also important in the COVID-19 demand issue, and believes that consumer commodities are the most undervalued on the market. He owns Procter & Gamble PG,
Kimberly-Clark KMB,
and Pepsi PEP,
three names that have yet to reach new highs continue to grow on both the top and bottom lines, he said.
Backlash on corporate taxes?
US stock futures ES00,
YM00,
NQ00,
are slipping after the Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
both set record highs Monday. SXXP European Shares,
they play catch up with Wall Street earnings, while Asia was mixed, with shares of China slipping after the central bank asked lenders to curb loan growth this year.
Democrat and influential Senator Joe Manchin warned that the proposed corporate tax rate on President Joe Biden’s infrastructure package is too high and would raise it to 25%, but not the 28% demanded by the bill.
The Senate non-partisan parliament on Monday ruled in a Democratic effort to pass more legislation through reconciliation, meaning the party could pass more measures in the Senate this year.
The Swiss banking giant Credit Suisse CS,
CSGN,
will have a $ 4.7 billion hit related to the fall of Archegos Capital Management. He also cut the dividend and announced he would leave his heads of investment and risk banking.
Roblox RBLX interpolation social gaming platform,
it’s in a sweet spot in the industry and Wall Street is realizing it.
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