"The Magnificent Seven have been running out of fuel well before we rang in the new year. And while the Mag Seven may have clocked in the most underwhelming first three weeks of the year in quite a while (the Mag Seven usually start new years with strength rather than weakness), I certainly wouldn't hit the panic button just yet."
"Given the lifting they've done over the past five years, I'd argue that a nice quarter (or more) of a breather is more than warranted. Of course, even if the Mag Seven exploded higher in the first three weeks of the year, I'm sure that we'd be hearing about how anxiety-inducing it is that the cohort is becoming overrepresented in the S&P 500. Indeed, overconcentration risk was a hot topic just over four months ago, when it seemed like the Mag Seven were unstoppable."
"While it's easy to dump the Mag Seven and other tech titans while showing more love to the 493 other stocks in the S&P 500, I do think that investors shouldn't make too much of the past quarter of sideways action. Mad Money host Jim Cramer said that he's not abandoning the Magnificent Seven, and I think he's spot-on to continue standing by the cohort as they move through a more challenging time right ahead of quarterly earnings season."
The Magnificent Seven experienced weaker performance in the first three weeks of the year, diverging from their typical strong starts. Market strength has begun to broaden beyond those seven heavy lifters of the S&P 500. Given their outsized contributions over five years, a pause of a quarter or more is reasonable. Overconcentration risk had been a concern when the group surged, but recent pullbacks have tempered that worry. Jim Cramer remains bullish on the cohort and advises continued holding through a potentially volatile earnings season. The companies retain significant resources and operational levers, so rebounds remain plausible.
Read at 24/7 Wall St.
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