© Reuters. Can S&P 500 rally without the Magnificent 7 leading the way? ‘Easy’ says BofA
The market enthusiasm for artificial intelligence (AI) has attracted investors to high-flying tech stocks, reminiscent of past bubbles, raising concerns among analysts.
The surge in the so-called “Magnificent Seven” tech stocks parallels historical bubbles, such as the dot-com boom of the late ’90s, which eventually led to a bust.
The “Magnificent 7” are collectively up about 80% this year while the rest of the is up in the low single digits.
“Concerns about narrow breadth this year are misplaced in our view, given that with the exception of the Tech Bubble, bull markets since the 1980s ended with far better breadth than today’s,” analysts at Bank of America said.
They remind investors that only 24% of stocks in the S&P 500 trade within 10% of their all-time highs, lower than the historical average of 28% when compared to prior bull market peaks.
As a result, analysts say the S&P 500 can “easily” print the fresh record high even without the Magnificent 7 leading the way.
“We forecast an all-time high for the S&P 500 in 2024, with a year-end target of 5000. But…
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