Stocks look about 7% pricey to FPI as a wild Fed-and-earnings week ends higher

Here's the short version: the market looks slightly expensive right now. FPI pegs it at about 7% above what it thinks these companies are really worth — so a touch pricey, not scary. And it nudged a bit richer this week, up from around 6% a week ago. Quick reminder on what this number is: FPI is a long-term read on value, not a knee-jerk reaction to one week's headlines, so don't expect it to swing wildly just because markets did.

And swing they did. It was a stomach-churning week built around the Fed and a wave of big tech earnings. On Wednesday the Fed left interest rates unchanged, and stocks turned sharply lower into the close, with the Dow sliding almost 2.2% — its worst day since the April 2025 selloff. The worry was that the Fed isn't doing enough to fight inflation. Then came the bounce: stocks rallied Thursday, rebounding from the prior day's selloff, with Microsoft and chip stocks driving the gains as the Nasdaq finished 2.8% higher, ending a six-day losing streak. Microsoft shares jumped 16% after strong growth in its Azure cloud business. On Friday the split personality continued — Amazon surged nearly 13% after beating expectations, while Apple tumbled 7.2% as its Services and China revenue fell short. Underneath it all, borrowing costs kept climbing: Treasury yields surged to multi-year highs, with the 10-year note reaching its highest level since January 2025. When the dust settled, the market actually ended the week up — the S&P 500 rose almost 1%.

Same story, louder. Tech and chips grabbed the wheel again this week. Information technology stocks were on track for their biggest one-day jump since mid-2025, with the sector adding nearly 5% in Thursday's session — the best of the eleven that make up the market. Microsoft's earnings and a chip rebound did the heavy lifting: the Philadelphia semiconductor index closed about 8% higher, snapping a five-day losing streak. When a group runs this hot this fast, the price usually races ahead of the plain math — which is why the AI-and-chips corner is the part of the market to size up carefully, not chase.

The quieter corners are where it gets interesting. Earlier in the week, money quietly shifted toward the boring-but-steady names — health care and financial stocks hit fresh highs as investors rotated into traditional parts of the market while the tech trade wobbled. Health care is the odd one out this earnings season: it's the only sector reporting a year-over-year drop in earnings. Soft results often mean softer prices, and softer prices are where bargains tend to hide. Worth a spot on your watchlist while the crowd stays glued to chips — set a buy price in the app and let the number come to you instead of the other way around.

The big story this week was SkyWest. FPI's read on the regional airline flipped hard — from looking richly priced (a wide gap above fair value) to looking deeply discounted (a wide gap below it). The trigger: SkyWest posted Q2 2026 results on July 23rd, reporting earnings of $2.54 per share, missing estimates of $2.72 by $0.18. Even so, the company kept leaning into growth and shareholder returns — the board approved a further $250 million increase to its stock repurchase program, lifting total remaining authorization to about $313 million, and it secured a deal to purchase and operate 11 new Embraer E175s for American Airlines. In plain terms, FPI now sees the stock trading well under what it thinks the business is worth.

Atlassian also drifted into cheaper territory versus fair value this week, though the software maker hasn't reported yet — its next earnings report is expected on 08/06/2026, with analysts projecting EPS of $1.27. So that's one to keep on the watchlist for next week. Zoom out and the tide leaned toward value: 64 stocks slipped below FPI's fair-value line this week, while 66 climbed back above it — a roughly even tug-of-war between bargains appearing and bargains disappearing.

Investors added 36 new buy prices this week, bringing the total to 413 across 140 stocks. Microsoft drew the most attention again, picking up two more targets to reach 42 — the biggest crowd on any single name. AMD kept building interest too, now at 11. And Realty Income (O) just crossed 10 investors, so its community buy zone is now unlocked in the app.

On the price side, Palantir saw the biggest shift — the group's middle buy price dropped about 3.4%, meaning folks are waiting for a cheaper entry. AMD's crept up a touch, while Microsoft and Nvidia barely budged. You can see all the exact zones in the app.

Two things top the list. First, a big batch of company results keeps rolling in. Caterpillar reports second-quarter results, with Wall Street calling for earnings of $6.20 per share on revenue of $19.2 billion, and chipmaker AMD reports after Tuesday's close, where analysts expect earnings of $1.61 per share, up from 48 cents a year ago. Palantir also reports after the close on Monday. Why care? Earnings feed FPI's models daily, so fresh numbers can nudge a company's fair value up or down the very next morning — a good moment to check your watchlist.

Second, the July jobs report lands Friday morning. Last month's report showed the U.S. added just 57,000 new jobs in June, well below the 115,000 economists expected, and earlier months were revised down by 74,000 combined. A hiring slowdown shapes how investors think about interest rates and the wider economy, which over time filters into what stocks across your portfolio are really worth. No Fed meeting this week, so jobs and earnings do the heavy lifting.