The Magnificent Seven: Record Highs and Slumps Amidst Economic Uncertainty and Rotating Investor Preferences

Silicon Valley, California United States of America
Apple reached record highs and closed at positive gains for the day.
Investors have been rotating out of some top performers like Nvidia and Meta due to hopes of Federal Reserve interest rate cuts.
Nvidia and Amazon began to slump.
Retail investor cash sitting on the sides has reached a record high of over $2 trillion as people sell their investments in mega caps and invest in small caps instead.
S&P 500 earnings expectations are currently at an all-time high of $259 per share.
The housing sector has seen a boost as they stand to benefit from lower rates, but bond yields must continue to drop for these stocks to keep rallying.
The Magnificent Seven, a group of seven tech stocks including Amazon, Apple, Alphabet (Google), Nvidia, Meta Platforms (Facebook), Microsoft, and Tesla experienced rotation in the market.
The Magnificent Seven collectively lost $599 billion in value on Thursday alone. Tesla saw a significant decline after reports of pushing back its robotaxi unveiling date.
The Sahm Rule, a recession indicator, could be triggered with unemployment potentially reaching 4.2% or higher in July or August.
The Magnificent Seven: Record Highs and Slumps Amidst Economic Uncertainty and Rotating Investor Preferences

The Magnificent Seven, a group of seven tech stocks including Amazon, Apple, Alphabet (Google), Nvidia, Meta Platforms (Facebook), Microsoft, and Tesla, experienced a significant rotation in the market on recent days. While some stocks like Apple reached record highs and closed at positive gains for the day, others such as Nvidia and Amazon began to slump.

According to data from Carson Group, S&P 500 earnings expectations are currently at an all-time high of $259 per share. However, a potential economic indicator called the Sahm Rule could be on the cusp of being triggered. The Sahm Rule is a recession indicator that tracks when the three-month moving average of the jobless rate rises by at least a half-percentage point from its low during the previous 12 months. With unemployment potentially reaching 4.2% or higher in July or August, this indicator could signal an economic downturn.

Investors have been rotating out of some top performers like Nvidia and Meta due to hopes of Federal Reserve interest rate cuts. The housing sector, including Home Depot and Caterpillar, has seen a boost as they stand to benefit from lower rates. However, bond yields must continue to drop for these stocks to keep rallying.

The Magnificent Seven collectively lost $599 billion in value on Thursday alone. Tesla, which had been on an 11-day winning streak, saw a significant decline after reports of the company pushing back its robotaxi unveiling date. Retail investor cash sitting on the sidelines has reached a record high of over $2 trillion as people sell their investments in mega caps and invest in small caps instead.

It's important to note that all sources should be taken with a grain of salt, as mainstream media cannot always be trusted without external evidence. Be sure to consider multiple perspectives and verify information from reliable sources before forming an opinion.


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Confidence

85%

Doubts
  • The accuracy of the unemployment rate data.
  • The reliability of the Sahm Rule as a recession indicator.

Sources

95%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Jim Cramer explains how to trade Thursday's tech sell-off

CNBC News Julie Coleman Thursday, 11 July 2024 22:09
  • Unique Points
    • Jim Cramer advised investors to take advantage of the rotation in the tech sell-off but warned it may not last long.
    • Investors rotated out of some top performers like Nvidia and Meta due to hopes of Federal Reserve interest rate cuts.
  • Accuracy
    • Bond yields must continue to drop for these stocks to keep rallying, according to Cramer.
    • People have sold their investments in mega caps and are investing in small caps as part of a rotation.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

84%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Mag 7 take a hit, $2T in sideline investor cash: Top Takeaways

Yahoo Finance Jared Blikre Friday, 12 July 2024 13:57
  • Unique Points
    • The Magnificent Seven, which includes Amazon, Apple, Alphabet, Nvidia, Meta Platforms, Microsoft, and Tesla had their worst day in over a year.
    • Tesla snapped its 11-day winning streak after reports of the company pushing back its robotaxi unveiling date.
    • Retail investor cash sitting on the sidelines has hit a record high, reaching over $2 trillion.
    • People have sold their investments in mega caps and are investing in small caps as part of a rotation.
  • Accuracy
    • The Magnificent Seven had their worst day in over a year.
    • Retail investor cash sitting on the sidelines has hit a record high, reaching over $2 trillion.
    • People have sold their investments in mega caps and are investing in small caps as part of a rotation.
    • Tech stocks, including Alphabet and Meta Platforms, make up over 42% of the S&P 500 market cap.
  • Deception (50%)
    The author makes several statements that could be considered deceptive or misleading. First, he states 'It's not true. It's not true. There is some green on the screen, not just Bitcoin.' This statement is a lie by omission as the author fails to mention that while there are gains in other sectors, the Magnificent Seven (AMZN, AAPL, GOOG/GOOGL, NVDA, META, MSFT, TSLA) experienced significant losses on this day. Secondly, when discussing the Russell 2000's price action and potential for future growth he states 'So I actually am bullish on small caps going forward just because of this one day price action.' This statement is an example of selective reporting as the author only focuses on the positive aspect of the Russell 2000's performance, ignoring any potential negative factors. Lastly, when discussing cash on the sidelines he states 'But that’s not what we’re dealing with right now. We’ll say that for another takeaway.' This statement is an example of editorializing as the author expresses his opinion about a potential future topic without providing any evidence or facts to support it.
    • It's not true. It's not true. There is some green on the screen, not just Bitcoin.
    • So I actually am bullish on small caps going forward just because of this one day price action.
  • Fallacies (85%)
    The author makes several fallacious statements throughout the article. First, he uses a dichotomous depiction by stating 'It's not true. It's not true. There is some green on the screen, not just Bitcoin.' This statement implies that there are only two possibilities: either all stocks are down or only Bitcoin is up, which is a false dichotomy. Second, the author makes an appeal to authority by stating 'Ed Yardeni on the show' and 'This goes back to the mid nineties.' The author uses Ed Yardeni's expertise as evidence without providing any context or evidence of his own. Lastly, the author uses inflammatory rhetoric by stating 'What a day I’m gonna show you the mag seven just got a beat down.' and 'This gets me to thinking, you know, the Russell 2000 has been stuck in this sideways range for quite some time. Is this finally the catalyst?' These statements are intended to elicit an emotional response from the reader rather than providing objective analysis.
    • It's not true. It's not true. There is some green on the screen, not just Bitcoin.
    • Ed Yardeni on the show
    • What a day I’m gonna show you the mag seven just got a beat down.
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

94%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

NVIDIA and Tesla Lead $599 Billion Magnificent 7 Sell-Off in Thursday Trading

Flywheel Publishing LLC dba 24/7 Wall St. Eric Bleeker Friday, 12 July 2024 00:30
  • Unique Points
    • The Nasdaq has outperformed small caps by large margins in recent years, but on Thursday the Russell 2000 gained 3.57% while the Nasdaq-100 fell 2.24.
    • There has only been one day in the past 30 years where such a large divergence existed between these two indexes: on November 9, 2020.
    • NVIDIA and Tesla were the biggest laggards among Magnificent 7 stocks on Thursday, with NVIDIA down 5.6% and losing $184.6 billion in market capitalization, and Tesla down 8.4% and losing nearly $71 billion in value.
    • The seven largest tech companies (Magnificent 7) as a group lost $599 billion in value on Thursday alone.
  • Accuracy
    • The Nasdaq has outperformed small caps by large margins in recent years, but on Thursday the Russell 2000 gained 3.57% while the Nasdaq-100 fell 2.24%.
    • The Federal Reserve reported inflation rose by 3% year-over-year in June, which came in cooler than expected and led to investors betting a rate cut is now more likely.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (85%)
    The author makes an appeal to authority by referencing the Federal Reserve's report on inflation and its potential impact on interest rates. He also uses inflammatory rhetoric by describing Thursday as 'historic' for the divergence between the Nasdaq and Russell 2000 indexes, and stating that investors are 'betting' on small cap stocks having more to gain from rate cuts.
    • The Federal Reserve reported inflation rose by 3% year-over-year in June. Cooling inflation points to a higher likelihood that the Federal Reserve will begin cutting rates.
    • Investors are betting that small cap stocks have more to gain from rate cuts and heavily rotated back into them after today’s CPI print.
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

98%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Mag. 7 rotation, earnings, Sahm Rule: Market Takeaways

Yahoo Finance Josh Lipton Friday, 12 July 2024 13:59
  • Unique Points
    • The Magnificent Seven (AMZN, AAPL, GOOG, GOOGL, NVDA, META, MSFT) are experiencing a rotation in the market with some stocks like Apple closing at record highs while others like Nvidia and Amazon begin to slump.
    • S&P 500 earnings expectations are at an all-time high of $259 per share.
    • The Sahm Rule, a recession indicator that tracks when the three-month moving average of the jobless rate rises by at least a half-percentage point from its low during the previous 12 months, could be on the cusp of being triggered with unemployment potentially reaching 4.2% or higher in July or August.
    • Chips are currently outperforming software in the tech sector with Nvidia leading the way and Broadcom up 2.5%.
  • Accuracy
    • The Magnificent Seven are experiencing a rotation in the market with some stocks like Apple closing at record highs while others like Nvidia and Amazon begin to slump.
    • The Fed may cut rates ahead of an election year if the Sahm Rule does trigger a recession.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication