Main U.S. indexes modestly green; FOMC statement 2 pm ET
Tech leads S&P 500 sector gainers; Real Est weakest group
Euro STOXX 600 index up ~0.2%
Dollar up; crude up ~1.5%; gold dips; bitcoin off >2%
U.S. 10-Year Treasury yield edges up to ~4.40%
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S&P 500 NOT IN 'BUBBLE TERRITORY' - WFII
While stocks are not cheap, the S&P 500 .SPX is not in "bubble territory," according to Scott Wren, senior global market strategist at the Wells Fargo Investment Institute, who sees the benchmark index ending 2025 in the range of 6,500 to 6,700.
The index was last at around 6,065, and is up about 27% for 2024 so far.
"After the S&P 500 index's big run higher following late October 2023 lows, many investors are wondering if stocks are overvalued," Wren writes in a note Wednesday.
He said the index is trading at over 22 times the firm's full-year 2025 earnings estimate, while in March of 2000 the index was trading at 30 times the consensus forward earnings estimate, which is "far higher than the current price-to-earnings (P/E) ratio."
A handful of megacap companies have dominated the index's performance in the last couple of years, he notes, but when those "Magnificent 7" stocks are removed from the equation, the P/E ratio for the rest of the stocks would be roughly 20 times next year's earnings estimates, which is close to the 10-year average P/E for the S&P 500.
"So one could argue that the bulk of the market is not seeing high valuations when compared to the 10-year average," he writes.
(Caroline Valetkevitch)
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FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:
FED DAY DATA ROUNDUP: HOUSING STARTS, MORTGAGE DEMAND, CURRENT ACCOUNT - CLICK HERE
U.S. INDEXES EDGE UP BEFORE FED - CLICK HERE
BENCHMARK TREASURY YIELD TILTING HIGHER AHEAD OF FED - CLICK HERE
WHAT IS STRATEGIC ABOUT A BITCOIN RESERVE? - CLICK HERE
UK INFLATION: HOW MUCH DID OPTICIANS SPEND ON THURSDAYS? - CLICK HERE
RELEASING GERMANY'S FISCAL STRAIGHTJACKET - CLICK HERE
DEALS THE DRIVING FORCE - CLICK HERE
EUROPE BEFORE THE BELL: DON'T THEY KNOW ITS CHRISTMASTIME? - CLICK HERE
MORNING BID: FED LOOMS AND EUROPE GETS INFLATION DATA - CLICK HERE
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