This past Thursday, the equity market advanced more than 2%, and this was maintained throughout the weekend. This is in main part due to the Mag 7, (MSFT, GOOG, APPL, AMZN, META, NVDA, TSLA), these companies make up for a combined 30.7% weight of the total market. Meaning that their performances as a group can single handedly determine how the market does as a whole. Obviously, these companies have been doing well, (their weighted average prices have gone up 14.48%). Which has accounted for most of the advance in the equity market as of late. The other 493 companies have gone up as a whole as well, just not accounting for near as much as the Mag 7. More specifically to put it into perspective, of the combined percentage points that the market went up, the MAG 7 accounted for 66% of them. Hopefully, the back 493 can start catching up to advance the market even more, and give a more accurate description of the equity market.
What factors might contribute to the disparity in performance between the Mag 7 and the remaining 493 companies in the equity market, and what strategies could these other companies employ to catch up and contribute more substantially to overall market gains?
ReplyDeleteIt's scary to think that these 7 comapnies can determine the market performance as a whole. While it great that they hold so much influence, if any of those companies in Mag 7 does poorly, it would have a vast negative imapct on the market. Alluding to the comment above, I don't think the other 493 comoanies can even catch up in the equity market. I think there would either have to be a large change in structure or the company would have to have a larger equity market value than the current Mag 7.
ReplyDeleteI think it is interesting how only seven companies can almost pull an economy up with them. I am invested in some stocks and mutual funds, and they have been rising as well. I didn't realize that the Mag 7 were pulling the price of stocks up.
ReplyDelete