00:00 Spokesman a
Let’s join NVIDIA shares outdoors by moving to the head today, despite this Tepid reaction, after the main address of CEO Jensen Huang, turning the magnificent seven trade as a whole here. The shares have seen their oldest start of the year in two years, with all members officially in negative territory, as Meta becomes the most, which will fall red for the year. Joining us now to destroy what it means for the wider market, we have a Josh Sorer, a reporter in our markets Josh. The big question, can the market recover without the MAG 7 recover?
00:27 Josh Scheffer
I think most people would probably not argue, Madi, right? So look at how MAG 7 did against the S&P 500 this year. It has been lagging behind the S&P 500 since the end of 2022. Of course, this was the end of the last naked market, right? It was a really big, big CAP technological sale. And I think the equation here, the fight is that we talked a lot about how these seven companies are so much of the index that they are so many of the index. When you look at it right now, they are still a lot of the index, are they? These seven companies still make up almost 31% of the S&P 500 market cap. In essence, saying where these companies are moving, whether up or down, it will give you the direction of the market. And this is really the action we’ve seen in the last month, right? The MAG 7 fell significantly this year. I think about 14% in total as an index. That’s more than S&P 500, right? So what he tells you is that the index drags it down. Even if you look at something like the S&P 500 equal weight, which is not so affected by the size of the market cap, to the right, which is equal to all stocks. This index decreased by only 4% in the last month compared to an 8% drop in S&P 500. So, in essence, what I say is not all I don’t work in this download. What doesn’t work is Tech Cap and at one point that weighs on the index. So, if you really want to see a full bounce here, you don’t need them to lead, but you will need a little involvement.
02:35 Spokesman a
So what are they right for investors right now? As I received this note, which just hit my inbox from UBS, saying that they will be the right investors, they should consider buying immersion in AI’s quality shares here. It seems that even if some of these AI plays do not lead to that they still have to have a coherent move so that the rest of the market can really be a beneficiary?
03:06 Josh Scheffer
Yes, I want to say, I think so, Brad, right? You watch these names, many of the names we talk about here, whether it’s Amazon, Nvidia was even more than Amazon, but we’ll put Amazon, Microsoft in a similar box. Meta, I believe that everyone is excluded about 20% of their recent 52-week peak, right? So most of them, that’s their highest time. And so you look at shares that accept such a big shave and the question is, it is good that we are priced in a very strong growth of profits for these companies, but if they continue to accelerate profit growth, right? It was a beaten and raising environment. It was a delay and an increase in the environment, which was the problem in the market that expectations began to catch up where these companies were. But there is certainly a case that you can make that we may have read them too low and there is a little purchase opportunity. But to your sense, CD Scott Croner told me that he still thinks that some of these shares are defensive, because if you are entering some kind of economic delay, any kind of concerns about the wider environment, where is the growth of profits quite consistent? This is a big Cap Tech, right? These companies have real revenue, they constantly publish profits, they make redemption, most of them have dividends. And so this is a place where you may go to hide, it’s not necessarily pure advice, but it’s a little protected, right? Because again, it is there that constant growth has been for several years. When we talk about the rest of the market, we talk about reliable growth, right? We hope that these 493 continue to accelerate profit growth. But it’s just an estimate right now. We don’t have to see this.
05:15 Spokesman a
And Josh, we have about a minute left, but how does Fed play in this conversation? If we hear them dive today, does this provide an elevator for all ships in the market boat right now?
05:27 Josh Scheffer
Yes, it looks like it? And so far, Madi, I wouldn’t be surprised if you see the Leam Cap Tech Lead, right? We saw this from some Fed meetings where the stock marketing general is gathering, but what is the most collected? This is NVIDIA, right? And so it seems that when you get the risk of moods, especially when you think again, Nvidia is not, it’s not an apple at 10 years ago when we were talking about Apple throughout the day and it was a market leader and maybe a little more than a quote endless stock. Nvidia can have a big day, right? So, if you start seeing a risk, perhaps this is the kind in which people start to accumulate, because again it is a popular retail name. This is a name that moves a lot and has many different options, tied to it, different things like this. So it will be interesting to see if we are getting any risk of rally or below today, the risk of rally. Whether the technology continues, as it has been, it has led to the market in the last few years. So far, this has led to the market this year.
06:44 Spokesman a
Josh, thank you very much. We will look closely. 2:30, Brad. A lot of price actions around there. I have to wait. I have to wait.