Bubble Angst Rears Its Head in Nasdaq, Striking Fear Into Bulls
- Nasdaq now in worst earnings-season underperformance in decade
- FAAMG dominance means market exposed to their earnings risk
Photographer: Michael Nagle/Bloomberg
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Stock bulls who have spent four months shoveling money into an ever-appreciating group of technology behemoths are getting the worst news imaginable: there may be a limit to how big these companies can get.
Despite quarterly results that have been by many measures spectacular, stocks in the Nasdaq 100 are currently at risk of their worst relative return during earnings season in a decade, trailing the S&P 500 by 3 percentage points. Given how hard it’s been for bad economic news to hurt the group, the culprit would seem to be valuations, which at 33 times income are double levels just 18 months ago.