Following a seven-month winning streak, equity markets are down so far in September. Stock indexes ended flat on Wednesday, giving up Tuesday gains on better-than-expected inflation data. While multiple fiscal stimulus packages and the Fed’s dovish monetary policy stance have been driving the economic recovery, concerns over the resurgence of COVID-19 cases and rising Treasury yields could cause investors to drop overvalued tech stocks.
We think weak fundamentals and poor earnings growth potential could cause overvalued software stocks Coupa Software Incorporated (COUP), Confluent Inc. (CFLT), and Ceridian HCM Holding Inc . (CDAY) to suffer a downturn in the near term. So, they are best avoided now.