U.S. stock futures traded unchanged on Monday after breaking a winning streak as investors became concerned about the sprawling valuations of stocks.
Dow futures rose 20 points. S&P 500 futures rose 0.07% and Nasdaq 100 futures rose 0.18%.
Shares fell Monday as investors rated high stock valuations amid recent record highs, apparently ignoring the backdrop of Covid-19 and political unrest.
On Monday, the Dow Jones Industrial Average lost nearly 90 points, dragging down a 2.3% drop in Apple’s share. The S&P 500 fell 0.66%
The Nasdaq Composite was the relative underperformer, down 1.25% as Facebook, Amazon, Netflix and Google parent Alphabet closed lower.
Tesla closed 7.8% for first negative day in 12 and worst day since September 23
DoubleLine Capital founder Jeff Gundlach on Monday warned of the market’s unusually high valuations compared to historical standards amid the risk of rising inflation.
“There are extraordinarily high valuations where we are, and this is supported by enormous amounts of stimulus,” Gundlach told Scott Wapner, CNBC, on ‘Halftime Report’.
“If you return four decades of stock market data, there are many valuation measurements that are the highest 1 percent of the overvalue. So, the thing that keeps it going, of course, is the Fed with rates at zero and promises. To zero. stay, “Gundlach added.” It allows valuations to be record high. “
“Historically, if the momentum and sentiment indicators have been stretched like this, the market should have a period of consolidation,” said Mark Hackett, head of investment research at Nationwide.
The stock comes from a strong week of gains that brought all three major averages to a record high. The biggest averages picked up riots at the U.S. Capitol, which led the House Democrats on Monday to file an indictment against President Donald Trump for inciting the attack. The lower chamber plans to vote on the article somewhere this week.
The best performers on Monday were those most sensitive to economic growth, such as banks, retailers and certain small capitals. Last week, President-elect Joe Biden promised an economic stimulus, which he said would be “in the trillions of dollars”.
The benchmark for small business Russell 2000 lost 0.03% on Monday.
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