Leaderboard

I think it is all about Mag7 and the rest. NO-LANDING: Mag 7 will do badly and the rest will do well (except for interest rate sensitive sectors e.g. financials). S&P 500 will probably go sideways. SOFT-LANDING: everything will do well with Mag7 probably leading the pack. S&P 500 might go up 10-20% or something. HARD-LANDING: everything will do badly with Mag7 outperforming as its earnings are more resilient than more cyclical sectors and lower interest rates are very bullish for long duration stocks. And so long as AI hype continues investors will probably look through any cyclical weakness in Mag7 earnings. S&P 500 might go down 10-20% or something. Possibly more if something majorly breaks. But I think that the Fed put will limit the damage. What I have observed is that since COVID investors have been treating Mag7 as a safe haven. And because growth has been scarce and Mag7 are the only companies growing their earnings it is understandable investors are willing to pay a big premium for their earnings. The wild card is AI. If it becomes clear that a wave of lawsuits and regulation are going to stall progress then that could dampen enthusiasm for Mag7. Tech earnings expectations are pretty ambitious with AI presumably expected to contribute and if it does then we could be in for a mid 90s melt up and an even more two tiered market.