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Feb 17
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$6843
$6881
+0.6%
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LONG
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Ben Carlson
Director of Institutional Asset Management, Ritholtz Wealth Management
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"The Mag 7 is down over 6% this year. The 493 is up almost 4%... the equal weight S&P, that's RSP, is up almost 6%." The market is broadening. Investors are no longer waiting for Tech to recover; they are actively diversifying into the "average" stock. If this spread continues, it will force passive flows and advisor allocations away from market-cap weighted concentration into broader exposure. LONG Equal Weight S&P 500 to capture the rotation into the broader market. A resurgence of Mag 7 dominance reversing the rotation. |
The Compound News
“Unrealized” Capital Gains Tax is Economic Su...
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Feb 11
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$6941
$6881
-0.9%
|
WATCH
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Carrie Firestone
Investment Committee Member
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"You take it in aggregate... there's a few big things that buoy the whole thing up. You disaggregate it, you look at the other 493, it's not as rosy a picture." While the headline S&P 500 earnings look strong, they are distorted by Mega Caps. The underlying health of the remaining 493 companies is questionable, suggesting the "broadening" narrative faces fundamental headwinds if those companies don't deliver earnings growth. WATCH. Be careful assuming the "average" stock is healthy just because the index is up; stock selection is critical outside the Mega Caps. If the economy accelerates significantly (soft landing achieved), the "493" earnings could catch up rapidly. |
CNBC
Here's how to trade around the hot jobs repor...
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Feb 06
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$6932
$6881
-0.7%
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LONG
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Ed Yardeni
President, Yardeni Research
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While the tech giants fight, the rest of the market (the "Impressive 493" and the Dow Jones Industrial Average) is performing extraordinarily well. The $650 billion being spent by the hyperscalers flows directly into the revenues of other companies. Building data centers requires 500 to 1,000 different vendors—including steel, concrete, wiring, and power. This acts as a massive economic stimulus, boosting GDP to ~5% and lifting the earnings of industrial and broader market companies. The Dow Jones is hitting record highs, and the economy has remained resilient despite high interest rates and inflation. A potential realization that the AI capital spending will not be profitable could eventually hurt the broader sentiment. |
CNBC
Market bounce back has to do with spending hy...
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