Tag: Magnificent Seven

Posted on

Are investors saying it’s time to move on from tariffs and if so to what effect on the markets?

Tariffs and the Markets

It looks like investor sentiment is shifting away from obsessing over tariffs—though not because they’ve disappeared.

Instead, there’s a growing sense that tariffs may be settling into a predictable range, especially in the U.S., where President Trump signalled a blanket rate of 15–20% for countries lacking specific trade agreements.

Here’s how that’s playing out

🌐 Why Investors Are Moving On

  • Predictability over Panic: With clearer expectations around tariff levels, markets may no longer treat them as wildcards.
  • Muted Market Reaction: The recent U.S.-EU trade deal barely nudged the S&P 500 or European indexes after moving the futures initially, signalling tariffs aren’t the hot trigger they once were.
  • Economists Cooling Expectations: Revisions to tariff impact estimates suggest future trade deals might not generate outsized optimism on Wall Street.

📈 Effects on the Markets

  • Focus Shift: Investors are turning to earnings—particularly from the ‘Magnificent Seven’ tech giants—and macroeconomic data for momentum.
  • Cautious Optimism: While stocks haven’t rallied hard, they’re not dropping either. Traders seem to be waiting for a new catalyst, like U.S. consumer strength or signs of a bull phase in certain indexes.
  • Geopolitical Undercurrents: A new deadline for Russia to reach a peace deal and threats of ‘secondary tariffs’ could still stir volatility, depending on how global partners react.

So, in short tariffs aren’t gone, but they’ve become background noise. Investors are tuning in to the next big signals.

If you’re keeping an eye on retail, tech earnings, or commodity flows, this shift could have ripple effects worth dissecting.

Market moving events, other than tariffs

DateEvent/CatalystMarket Impact Potential
July 30Meta earnings + possible stock split📈 High (tech sentiment)
July 31Fed meeting📈📉 High (rate guidance)
Aug 1U.S.–EU tariff milestone, not flashpoint📉 Moderate (sector recalibration)
July 22U.S. AI Action Plan (released)📈 Unclear (dependent on execution
Posted on

S&P 500 enjoyed a 23% gain in 2024 but 2025 may not be so good

The S&P 500 index witnessed big gains right from the start of 2024. In the first quarter of the year, it jumped up 10.20%. That’s around more than 10 times its average gain since 2000.

However, the momentum couldn’t be sustained as the S&P added 3.9% and 5.5% in the second and third quarter of 2024. In any other year, investors might not have been disappointed with those figures. But the index’s first-quarter performance set expectations so high that subsequent quarters seemed to pale in comparison.

In the final quarter of 2024, the S&P limped to a gain of just 1.9%. Making things worse, we did not get a 2024 Santa rally.

Of course, a gain is a good. But it’s hard not to e just a little disappointed when looking back at the highs we enjoyed in early 2024.

That said, a relatively weak end to the year wasn’t enough to dent the gains of the S&P 500 in the early part of 2024, where the index surged 23.30%. The index recorded no fewer than 57 record closes and this on the back of a 24.2% rise in 2023.

Big tech and Artificial intelligence stocks (the Magnificent Seven in particular) were behind much of 2024′s gains. Shares of Nvidia were up by around 171%, while Broadcom jumped 108%. To place this in context – the Magnificent 7’ stocks were responsible for more than half the S&P 500′s 2024 gain. It does beg the question – is the initial AI hype over for now or is there more to come? Has AI settled for the moment?

Uncertainties await the markets in 2025. Investors will have to contend with the incoming Trump administration’s policies, possibly higher-than-expected interest rates for the year, which in turn are keeping Treasury yields elevated, among other headwinds.

Trumps tariffs are on the way.

Posted on

Magnificent 7 company profits now exceed almost every country in the world

Magnificent Seven market cap at $15 trillion

The Magnificent Seven, or MAMA ANT, is a term coined by Bank of America to describe the seven most dominant tech companies in the world

The Seven are: Microsoft, Amazon, Meta Platforms, Apple, Nvidia, Tesla, and Alphabet. These companies have not only led the tech sector in terms of innovation, growth, and profitability, but have also become some of the most valuable entities in the world by market capitalization.

Valuation at $15 trillion

Market capitalization, or market cap, is the total value of all the shares of a company that are traded on the stock market. It reflects the market’s perception of the company’s future prospects and earnings potential. 

As of January 2023, the Magnificent Seven had a combined market cap of about $15 trillion, which was more than the gross domestic product (GDP) of almost every country in the world, except for the United States, China and Japan (just).

Magnificent Seven

The Magnificent Seven have achieved such a remarkable feat by leveraging their core competencies in various fields of technology, such as artificial intelligence (AI), cloud computing, social media, e-commerce, gaming, electric vehicles, and online advertising. They have also diversified their revenue streams by acquiring or developing new products and services, such as Activision Blizzard, AWS, Oculus, iPhone, GeForce, SpaceX, and YouTube. They have also benefited from the increased demand for digital solutions amid the Covid-19 pandemic, which accelerated the adoption of online platforms, remote work, and entertainment.

Challenges

However, the Magnificent Seven also face some challenges and risks that could threaten their dominance and valuation. These include increasing competition from other tech companies, especially from China, such as Alibaba, Tencent, Baidu, and Huawei.

They also face regulatory scrutiny and pressure from governments and consumers over issues such as antitrust, privacy, taxation, content moderation, and environmental impact. Furthermore, they may encounter technical difficulties, security breaches, or ethical dilemmas that could damage their reputation and customer trust.

Conclusion

In conclusion, the Magnificent Seven are the most powerful and influential tech companies in the world, and their market cap surpasses that of almost every country in the world.

List of 10 countries by stock market capitalization

List of 10 countries by stock market capitalisation

The meteoric rise in the profits and market capitalisations of the Magnificent 7 U.S. tech giants: Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla – outstrip those of all listed companies in almost every G20 country. Of the non-U.S. G20 countries, only China and Japan (and the latter, only just) have greater profits when their listed companies are combined.

They have achieved this by exploiting their competitive advantages in various domains of technology and expanding their offerings and markets. However, they also need to overcome some challenges and risks that could hamper their growth and value in the future.

A forced size reduction to stop the monopolising of market share could help tame these beasts too and open up fairer competition.

Should we worry?

Basically, yes, we should be concerned about the size and dominance of these companies.

This level of wealth and power concentrated in just a handful of companies has led some analysts to voice concerns over related risks in the U.S. and global stock markets.

Economists and stock market analysts have cautioned that the U.S. stock market is rivalling 2000 and 1929 in terms of being at its most concentrated in history.

The rest is history…

Posted on

Happy days on Wall Street for BIG tech companies

Tech

It was a good day of earnings for Big Tech companies. 

Three of the Magnificent 7 results dominated the headlines: Meta, Amazon and Apple. Nasdaq and S&P 500 gained in ‘after the bell’ trading. This after a punishing day for Alphabet and Microsoft, despite good results.

Nasdaq 100 closed at: 17344 but climbed above 17500 in after-hours trading.

Wall Street seemed impressed with Meta’s results.

Meta

Shares of Meta surged 15% after the social-media giant defied analysts’ estimates. It posted earnings of $5.33 per share on revenue of $40.11 billion. The company also declared its first-ever dividend payment. Share buy-back was also announced.

Meta platforms Inc. One year chart

Meta platforms Inc. One year chart
  • The results show Meta’s online ad business continues to recover well from a terrible 2022.
  • Sales in the Q4 jumped 25% year on year.
  • Expenses decreased 8% year over year to $23.73 billion.

Amazon

Investors also enjoyed Amazon’s earnings, which easily topped Wall Street’s predictions. The ecommerce giant also provided a strong positive outlook. The stock jumped 7% in extended trading.

Amazon.com Inc. One year chart

Amazon.com Inc. One year chart

Q4 was a record-breaking Holiday shopping season in the U.S. and closed out a robust 2023 for Amazon. Amazon has much planned for 2024.

Apple

But Apple didn’t benefit from the same treatment despite posting strong results.

Apple Inc. One year chart

Apple Inc. One year chart

Apple also exceeded estimates, reporting revenue growth for the first time in a year. But shares slid more than 2% in extending trading after it posted a 13% decline in sales in China.

Apple’s outlook suggesting weak iPhones sales may have also disappointed investors.

Posted on

The Magnificent Seven

Magnificent Seven

The Magnificent Seven is a term coined to describe the seven most valuable and popularly owned tech companies in the U.S. stock market.

It was also a 1960’s movie…

The Seven

Apple (AAPL)

The world’s largest software company, known for its iPhone, iPad, Mac, Apple Watch, AirPods, and other devices, as well as its services such as iCloud, Apple Music, Apple TV+, and App Store.

Microsoft (MSFT)

The world’s largest software company, known for its Windows operating system, Azure cloud services, LinkedIn social media platform, Office professional software suite, and Xbox gaming brand.

Alphabet (GOOGL)

The parent company of Google, the world’s leading search engine, as well as other businesses such as YouTube, Google Cloud, Google Maps, Google Ads, and Waymo.

Amazon (AMZN)

The world’s largest online retailer, as well as a leading provider of cloud computing services through Amazon Web Services (AWS), and a major player in digital entertainment through Amazon Prime Video, Amazon Music, and Kindle.

Meta Platforms (META)

The former Facebook, the world’s largest social media network, as well as the owner of other popular platforms such as Instagram, WhatsApp, Messenger, and Oculus.

Nvidia (NVDA)

The world’s leading manufacturer of graphics processing units (GPUs), which are used for gaming, artificial intelligence, cloud computing, and cryptocurrency mining, as well as other products such as Nvidia Shield, GeForce Now, and Omniverse.

Tesla (TSLA)

The world’s most valuable automaker, known for its electric vehicles, battery products, solar panels, and self-driving technology, as well as its visionary founder and CEO, Elon Musk.

Market dominance

These seven companies are not only dominant in their respective fields, but also at the forefront of innovation and growth in the tech sector. They collectively make up some 30% of the S&P 500 index and more than half of the Nasdaq 100 index. 

They have also delivered impressive returns for investors over the past five years, with Nvidia and Tesla leading the pack with more than 800% gains. The Magnificent Seven are often compared to the FAANG stocks, which include four of the seven companies, but exclude Microsoft, Nvidia, and Tesla, and include Netflix instead. 

Magnificent 7 tech stocks

Some analysts suggest that the Magnificent Seven capture the current state and future potential of the tech industry. But is it now time to rotate out of tech into other areas that have been neglected. I wouldn’t be surprised to see the bull market charge on but with other ‘less’ loved companies leading the way.

It has been calculated that the combined market cap value of these seven companies is some $9 trillion.