US equity markets have begun a significant rotation this month. We have written about the handful of tech stocks that have been responsible for more than half the return in some of the most popular stock indices during the first half of this year. Large tech companies are in green, the Dow Jones Industrial Average is in red, and small US companies are in blue.
https://get.ycharts.com/resources/blog/how-3-stocks-drove-half-of-the-us-market-gains-in-1h-2024/
This month we’ve seen investors sell shares in these major tech stocks and rotate into a broader mix of large- and small-cap US companies.
The meteoric rise of such a small number of companies can’t go on forever. We’re glad to see that as investors sell shares of these tech giants so far this month, they are reinvesting in other companies instead of parking more cash in money markets.
Is this the beginning of a major rotation? It’s too early to tell, but a broadening of gains to other sectors of the market could make for a healthier stock market in the second half of the year.
“Magnificent 7 Stocks Got Hammered. Don’t Buy the Dip, and 4 Other Things to Know Today.” – Barron’s, July 18, 2024
“Big Tech shares lose lustre as US market rocked by violent rotation” – Financial Times
https://www.ft.com/content/6983ad77-3e16-42c7-86fc-bf011d2e5b1a
“Is a stock-market rotation under way? Small-caps surge as Magnificent Seven gets punished” – Morningstar
Have a great weekend.
Jack C. Harmon II, CFP®, CIMA
Principal, Harmon Financial Advisors
Registered Principal, Raymond James Financial Services
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