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Will investors look beyond the magnificent seven in 2024?

Davy does not expect a repeat of 2023 as recent market activity highlights broader recent rally in S&P 500

The magnificent seven – Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, Meta – are unlikely to repeat their dominance next year, Davy says in its 2024 outlook.

Not everyone agrees – Goldman Sachs expects the magnificent seven to again outperform in 2024 – but there are signs investors are broadening their horizons. On Monday last week, the S&P 500 advanced even though all the magnificent seven stocks fell – the first such instance since July 2022, notes eToro’s Callie Cox.

One day does not make a trend, but the recent rally means an equal-weighted version of the S&P 500, which weighs each component stock equally, is now up 10 per cent in 2023. That’s still well below the capitalisation-weighted S&P 500 (23 per cent), but breadth has improved. Three-quarters of stocks are above their 200-day moving average; 90 per cent are above their 50-day average.

It is, says Davy, “hard to double” the value of a $3 trillion (€2.7 trillion) company, so the market story may well be about the “equally magnificent 493″ in 2024.