Market rally pushed stocks to about 9% above fair value this week

Right now the market looks a little expensive. FPI pegs stocks at about 9% above what it thinks they're really worth — up from about 7% a week ago. So prices got a touch pricier this week, but we're still talking "slightly overvalued," not "wildly stretched." One thing to keep in mind: FPI's reading is a long-term valuation signal built from what companies are actually worth, not a knee-jerk take on any single week's headlines.

So what actually moved things? A weak jobs report lit a fire under stocks. The U.S. economy lost 23,000 jobs in July — a shock, since economists had expected a gain of around 83,000. Normally bad news, but investors read it as a reason for the Federal Reserve to hold off on raising rates. The read was simple: a cooling job market means the Fed won't need to hike interest rates soon. That sent money flooding back into stocks. It was a second straight week of gains — the S&P 500 rose about 4% and the Nasdaq jumped roughly 5%, powered by a bounce-back in chip stocks. Both the S&P 500 and Nasdaq finished at record highs — the strongest weekly rally since April. Oil, meanwhile, drifted the other way: crude finished down about 3% for the week. When markets climb this fast, valuations tend to catch up — which is exactly what FPI's reading is telling us.

The priciest corners keep getting pricier. Basic Materials sits about 36% above what FPI thinks the businesses are worth, Technology about 30% over, and Industrials about 23%. Tech's climb had plenty of fuel this week — the technology and consumer discretionary sectors led Friday's gains, and more than 85% of S&P 500 companies reporting second-quarter earnings beat Wall Street expectations. The Nasdaq gained around 5% over the week, thanks to a bounce-back in chip stocks. Good news, but when prices race ahead of value like this, you're paying a premium for that optimism.

The bargains sit on the other end of the list. Financial Services trades about 32% below fair value — the cheapest group by a wide margin — with Utilities around 14% under and Energy roughly 7% under. Those are the spots worth a place on your watchlist, where FPI sees more business than price. Energy is a mixed bag right now: geopolitical tensions in the Middle East remain an important factor for oil prices, which can swing the sector either way. Healthcare and Communication Services are sitting near fair value, roughly break-even. One quick note on geography: European and US stocks are priced almost the same versus fair value, both a touch under 10% over — so the pricey-versus-cheap story is really about which sector you're in, not which side of the Atlantic.

Two earnings reports did most of the moving this week. Playtika (PLTK) dropped hard: it reported higher second-quarter revenue and a sharp profit improvement, but softened expectations for the full year, signalling both revenue and adjusted earnings may finish near the lower end of its ranges. The stock fell about 14% as investors focused on management's warning that the company expects to finish the year toward the lower end of its guidance range. After the drop, FPI sees it as deeply cheap — its gap widened to roughly 132% below fair value, meaning the price is now a fraction of what FPI thinks the business is worth. Going the other way, FIS (Fidelity National Information Services) jumped after a solid quarter: it posted quarterly earnings of $1.48 per share, beating estimates and up from $1.36 a year ago, with free cash flow more than tripling year-over-year to $525 million and a raised full-year free cash flow outlook of $2.2 billion. That pop pushed FIS from bargain territory to about 50% above fair value — so it's now pricier than FPI's estimate.

Elsewhere, Minerals Technologies (MTX) and Oracle (ORC.DE) both slid from well above fair value to clearly below it, while West African Resources and Douglas Emmett (DEI) were among the names that ran up past what FPI thinks they're worth. Zooming out, 63 stocks slipped into undervalued territory this week — more than 10% below fair value — so it's worth a look at your watchlist to see what's newly on sale.

Investors added 23 new buy prices this week, bringing the total to 436 across 146 tickers. The attention landed squarely on big tech. Microsoft picked up two more (now 44 people watching), Apple added two (now 31), and Meta drew three (now 24). Netflix and The Trade Desk each gained two as well. No new community buy zones opened up this week.

As for where people nudged their targets: Google saw the biggest move, with its typical buy price ticking up about 1% among 21 investors — folks getting a touch more patient. Meta went the other way, easing down slightly, while Microsoft and Apple barely budged. Small moves overall, which usually means the community is watching, not scrambling. You can see the actual buy zones inside the app.

Two numbers dominate. The July Consumer Price Index lands Wednesday, August 12 — that's the running tab on how fast prices are climbing, and it shapes what the Fed does with interest rates next month. Why care? When rate expectations shift, so does the value of every stock you own, especially pricier growth names. Then the Producer Price Index — a look at costs further up the supply chain — arrives later in the week, giving an early read on whether those cost pressures are cooling or building.

On the company side, it's a lighter earnings week, but keep an eye on Cisco. The tech company reports after Wednesday's close, and analysts expect solid growth driven by demand for AI infrastructure. Fresh earnings feed straight into FPI's fair-value models daily, so a big beat or miss can nudge what a stock is really worth. If names on your watchlist report, this is a good moment to check whether the FPI reading has moved and consider setting a buy price in the app.