Markets are in a 'show-me' environment as valuations expand
Charles Schwab chief investment strategist Liz Ann Sonders joins Market Domination Overtime to discuss the state of the market (^DJI, ^IXIC, ^GSPC) and its current valuations after the most recent bout of volatility (^VIX). "Valuation is marginally better thanks to the pullback. We did see a little bit of an easing in some of those mega-cap names. But we're still in the high 20s [percent] for the Magnificent Seven. So you are at that point, especially given we've seen some deterioration in third quarter consensus estimates relative to second quarter, that we are a bit in that show-me environment because of valuation expansion that predated this recent pullback," Sonders explains. She notes that stocks outside of Big Tech's Magnificent Seven are "more reasonable" in terms of their valuations and that only 11% of the S&P 500 (^GSPC) has outperformed the index itself. As the market broadens out, she argues, "I think that to some degree is this idea that there is value to be found outside of that small subset of prior leadership names." For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime. This post was written by Melanie Riehl
