Stock market today: S&P 500, Nasdaq futures tumble ahead of earnings rush as valuation worries creep in

Shares of Denny’s shot up nearly 50% in premarket trading after the company said it has agreed to be bought by a group of investors that will take the casual dining chain private.

Reuters reports:

Read more here.

Bloomberg reports:

Wall Street chief executives said investors should brace for an equity market drop of more than 10% in the next 12 to 24 months, and that such a correction may be a positive development.

Corporate earnings are strong but “what’s challenging are valuations,” said Mike Gitlin, who helps oversee about $3 trillion as president and chief executive officer of investment manager Capital Group, during a financial summit organized by the Hong Kong Monetary Authority on Tuesday.

On whether stocks are cheap, fair or fully valued, Gitlin said most people “would say we’re somewhere between fair and full, but I don’t think a lot of people would say we’re between cheap and fair,” he said. The same goes for credit spreads, Gitlin added.

His views were echoed by Morgan Stanley CEO Ted Pick and Goldman Sachs Group Inc.’s David Solomon, who also see the possibility of a significant selloff in the coming period and said pullbacks are a normal feature of market cycles.

Read more here.

Palantir (PLTR) stock dropped over 4% in extended trading after a heated rally despite beating third quarter expectations, as analysts argue the company is overvalued.

Read more here.