To put those performances into perspective, at more than $US2000 a share, Amazon is trading on a price-earnings ratio of 207. The FANGs as a group are trading on a price-earnings ratio of just under 36. The overall market is trading on a historically high multiple of almost 21 times earnings. Loading While it is hard to argue against the success of the FANGs and other tech companies, that doesn’t necessarily mean they are correctly valued. The increasing concern that the US market is in a FANG-inflated bubble – that their valuations have been stretched too far - has been behind a modest sell-off of the US market in the past few days. Approaching the 10th anniversary of the onset of the global financial crisis – Friday will mark the anniversary of the placing of the two big US mortgage finance agencies, Fannie Mae and Freddie Mac into conservatorship, just under a week before Lehman Bros filed for Chapter 11 protection – the US market is valued at about 3.25 times its post-crisis low point in March 2009. There has been a flurry of commentary, prompted by the stretched valuations, asking whether the US market is on the cusp of another major meltdown, with the FANGs regarded as a significant vulnerability.

The longevity of this bull market is another reason for the increased questioning of its sustainability. Loading That’s despite the backdrop of recent US economic growth tracking at more than 4 per cent and one of the strongest US earnings seasons in decades. June-quarter earnings for the S&P 500 were up more than 20 per cent. The Trump tax cuts and increased spending have clearly accelerated US economic and corporate earnings growth. There are, however, a number of negative developments that point to the fragility of the equity market as we enter the twilight zone that follows the US summer-vacation period – the September to November period when the market has experienced convulsions in the past. There’s the Fed. It is expected to increase US rates again this month. From next month the reduction in its bond and mortgage purchases, the legacy of its response to the crisis, will reach its peak $US50 billion a month level, withdrawing liquidity from markets.

There are trade conflicts. As early as Friday the Trump administration may slap its next $US200 billion of tariffs on China. China will inevitably find a way to retaliate. A sign displaying US dollar exchange rates hangs as people wait inside of a currency exchange house in Buenos Aires, Argentina. Argentina's currency crisis intensified last week as the peso plunged 20 per cent. Credit:Bloomberg There’s also an emerging developing economy crisis. Argentina, Turkey and South Africa are under extreme pressure, with imbalances and weaknesses in the structure of their economies – high debt levels, inflation and soaring interest rates - now being exacerbated by the surge in the US dollar. Since mid-April, on a trade-weighted basis, the US dollar has appreciated 6.5 per cent. While that is pulling the rug from under economies with large exposures to US dollar-denominated debt, if sustained it will also choke off the growth in the US economy as its exports and trade-exposed industries lose competitiveness and the effectiveness of Trump’s tariffs is undermined.

Also looming as an unsettling influence on markets are the US mid-term elections, with the possibility – the polls say probability – that the Republicans could lose control of the House. Couple that with the sprawling Mueller Russia investigation and you can add political instability to the concerns. It’s the big picture issues that really threaten the bull market. The unusual monetary policies adopted by the Fed and its peers elsewhere in response to the crisis are finally being wound back in the US and, to a degree, in Europe. The high watermark for those policies, which deliberately pushed savings into riskier investments, like equities - and which has inflated their values and excised any notion of pricing in risk in the process - has passed. The Trump policies of big deficit-funded tax cuts and spending even as the US economy is near full employment will eventually collide with the Fed’s normalisation of US monetary policy, in the absence of an earlier market crash. With the developing economies on the cusp of crisis, Europe slowing, the Trump trade wars threatening to undermine global growth and stability and the mix of menacing domestic developments in the US, a stockmarket priced for perfection is vulnerable.

Stocks within it that have been priced beyond perfection – 27 per cent compound annual sales growth cannot be sustained in perpetuity – are exceptionally so. The FANGs led this market to its peak. They may yet lead it down. Amazon's Jeff Bezos... on paper his company's soaring share price has made him America's richest man. Credit:AP