📈 Magnificent 7 in Focus

These names are the most important to watch.

Magnificent 7 in Focus

We spend a lot of time talking about the Magnificent 7 stocks, and are often trading them. There’s good reason for that.

I’m going to run through some research on these stocks and how they are impacting the broader stock market.

First off, these names compose the greatest percent of the S&P 500 market cap than they ever have before.

The top 10 stocks account for over 36% of the total S&P 500 market cap.

This is for good reason, as you can see that these names are delivering best-in-class results. Above you can see that their profit margins dwarf the rest of the S&P 500.

As a result, these names are bought, and their P/E ratios are far above the average of the rest of the index.

None of this is necessarily a problem until you zoom out and take a look at the performance of the rest of the index.

Above you see that the amount of stocks within the S&P 500 that are outperforming the index as a whole is at a historic low.

So we are essentially being carried higher solely by the Magnificent 7.

What we would like to see is the breadth pick up, giving us more options for trades, and allowing us to not be so reliant on the performance of the Magnificent 7 to carry the market.

This isn’t necessarily an imminent threat to the market, but it’s something to be wary of going forward.

I walk through additional research on this as well as run through recent earnings reports and stocks I’m buying in this video: