US stock futures were flat in Monday morning trading after breaking a winning streak, with investors worried about strained stock valuations.
Dow futures were up 20 points. S&P 500 futures jumped 0.07% and Nasdaq 100 futures jumped 0.18%.
On Monday, stocks fell as investors assessed high stock valuations amid recent high records, apparently disregarding the Covid-19 scenario and political turmoil.
On Monday, the Dow Jones Industrial Average lost nearly 90 points, pulled down by a 2.3% drop in Apple shares. The S&P 500 fell 0.66%
Nasdaq Composite performed relatively poorly, falling 1.25%, as Facebook, Amazon, Netflix and Alphabet, Google’s father, closed lower.
Tesla closed down 7.8% for its first negative day at 12 and worst day since September 23
DoubleLine Capital founder Jeff Gundlach warned on Monday of the market’s extremely high ratings against historical standards amid the risk of rising inflation.
“In extraordinarily high ratings is where we are, and it is being supported by huge amounts of stimulus,” Gundlach told Scott Wapner of CNBC in the “Interval Report”.
“If you go back four decades of stock market data, there are a lot of valuation metrics that are at the highest 1% of overvaluation. So what’s keeping this going, of course, is the Fed with zero rates and promises to stay at zero, “added Gundlach. This “allows ratings to be record-breaking.”
“Historically, when momentum and sentiment indicators are so stretched, the market is going through a period of consolidation,” said Nationwide head of investment research, Mark Hackett.
The shares are coming out of a week of strong gains, which brought the top three averages to record highs. The mainstream media ignored the US Capitol disturbances that prompted House Democrats to present an impeachment article on Monday against President Donald Trump for inciting the attack. The lower house plans to vote on the article later this week.
Outperformers on Monday were the most sensitive to economic growth, such as banks, retailers and some small businesses. Last week, President-elect Joe Biden promised an economic stimulus launch, which he said was “in the trillions of dollars.”
The small cap Russell 2000 benchmark lost 0.03% on Monday.
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