Great week

It has been a pretty great week for most of the Magnificent Seven.

Source: Bloomberg

Great year

We are sure you don’t need reminding that they have been 91% of The S&P’s move YTD.

Source: Bloomberg

One group to find them

The Magnificent Seven vs the S&P 500 in 2023. 

Mag 7 +95% and S&P 500: +15%

Source: Koyfin

One group to rule them all

Bloomberg Magnificent 7 index performance over the past few years is just astonsishing. But wait, surely that isn't a double top...?

Source: Bloomberg / Jefferies

General tactical set-up is pretty bullish

22 out of 22 times...

S&P500 is now up 15% YTD. The last 22 years that S&P500 was up >5% by this time of the year, the remainder of the year was positive EVERY year. For the past 50 years the set-up was 27 positive years vs 3 negative.

Source: Wayne Whaley

Breaking out to the upside

Size matters. Large vs small chart is going into unchartered territory.

Source: FactSet

The worst is behind us

Best recession ever...The "Global Leading Indicator" by UniCredit says that the worst is behind us.

Source: Unicredit

New EPS highs

12m forward EPS has reached new highs for S&P 500.

Source: Soc Gen cross-asset

But there are risks...

Risks, we had a few....

GS says that a still-bright world has dark sides....Here are the risks they think are worth keeping an eye on.

1. the higher-for-longer rate environment could cause more vulnerable EM sovereigns to lose market access, lead to a further rise in Euro area sovereign stresses, and complicate the policy trade-offs facing policymakers in China and Japan

2. this rates environment may expose areas of vulnerability in the US related to smaller companies’ access to finance, continued pressure on some credit provision by small banks, and subdued mortgage, housing, and commercial real estate activity

3. the deteriorating public debt profile in DMs is a growing concern

4. rising geopolitical concerns and, in particular, the risk of an escalation of the war in the Middle East could lead to significant increases in energy prices (Goldman)

Draining liquidity

Central bank balance sheets continue to shrink, draining liquidity: a risk for 2024?

Source: Macrobond

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