Though still yet to break out of its downtrend, Google bounced from $83.72 to $96.73 and now sits 2.08% above its 20 SMA. This price gives Google stock a P/E ratio of 19.31 and a forward P/E ratio of 18.25.
Many stocks bounced a long way this week due to the hope that inflation may have peaked. But it was surprising to see how much the larger cap stocks bounced in comparison to the small to medium-cap stocks. With small to mid-cap stocks dropping so far due to inflation, many assumed they would rebound once the news on inflation turned positive. However, so far that hasn’t been the case. Ark Invest stocks aren’t bouncing much higher than FAANG stocks yet.
This could mean many institutional investors still see risk in small to mid-cap stocks if inflation is going to remain uncomfortably high for a prolonged period. Many fund managers have suggested recently that investors should still be looking for companies that have real revenue and profit.
Cathie Wood has suggested that we are headed for similar deflationary times as the 1920s when stocks went up very quickly in the lead-up to the Great Depression, where we may be headed for -15% inflation. If Wood is right, her stocks will indeed bounce extremely high.
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