S&P 500 is broadening out from the Magnificent 7 - Citi
Mar. 20, 2024 11:05 AM ET
By: Jason Capul, SA News Editor
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Citi argued on Wednesday that data is starting to suggest that the S&P 500 is broadening out in terms of its performance and is showing signs that it’s no longer as weighted towards the Magnificent 7 names.
“More than two thirds of S&P 500 companies have a positive return YTD, while 177 members have outperformed the index this year. Nearly half of the index (233/500) has climbed +5% or more YTD,” Citi's U.S. equity strategy team stated in an investor note.
The financial institution added that while the mega-cap sector homes of Info Tech ( XLK) and Communication Services ( XLC) have outperformed the S&P 500, they are not the only sectors to do so. Energy ( XLE) and Financials ( XLF) are also outperforming the broader average while segments like Health Care ( XLV) and Industrials ( XLI) are not far off the pace as well.
Citi further noted that of the Magnificent 7 names, Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), Amazon (NASDAQ: AMZN), Meta Platforms (NASDAQ: META) and Alphabet (NASDAQ: GOOG) have now contributed 4.7% of the 8.3% S&P 500 2024 returns. “Said differently, 57% of the index performance this year has been a function of these names,” the firm noted. At the same time the other two Mag-7 names Tesla (NASDAQ: TSLA) and Apple (NASDAQ: AAPL) together have been -1.2% drag on the benchmark index in 2024.
On a separate stance, over the past month, the world’s largest exchange traded fund SPDR S&P 500 ETF Trust ( SPY), which is weighted towards the Magnificent 7 group, is higher by 3.8%, while the Invesco S&P 500 Equal Weight ETF ( RSP), which evenly distributes its portfolio allocation across the S&P, is not far behind at+3.4% over the past month.
Magnificent 7 2024 year-to-date returns: NVDA +80.5%, META +40.2%, AMZN +15.7%, MSFT +12.1%, GOOG +4.9%, AAPL -8.5%, and TSLA -31.1%. |
