The stock market on steroids

The stock market has advanced above its summer highs. But, the Nasdaq 100 is below its September highs. If the stock market was truly bullish, the biggest companies in the Nasdaq would be leading the way forward. The extremely high valuation of the stock market is still present at about 23 times earnings; the historical average is closer to 14. The bond market has been falling since late June with the yield on the U.S. 10-year note moving up from about 1.5% to about 2.5%. The bond market tends to change trend between 6 months and 1 1/2 years before stocks. Therefor, stocks may start dropping as soon as late December.

The best performing sector in my table of relative-strength stock-market sectors is the Technology Hardware Sector. Here are their revenues and earnings compared year over year:

PBI -6.4% 6.3%
STX -18.2% -78%
JNPR 7.7% 46%
XRX -7.6 -66%
NTAP -9.4% -59%
HPQ -7.2% -9.2%
AAPL -7.7% -14.4%
CSCO 2% 17.5%
Average 5.9 19.6%

These aren’t exactly stellar results, are they?

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