What’s behind all the recent rotation?

00:00 Josh

Jared, I know you’ve been tracking that rotation underway this month from chip stocks to the Mag 7. Just walk us through that. What’s behind that?

00:04 Jared

Yeah, let’s take a look at what we’ve done in the month of July in the Dow. So it’s been 10 trading days or today the number 10, and you can see we are up a whopping half of 1%. So the Dow has gone nowhere. Nasdaq has literally gone nowhere, only up about two basis points. The S&P 500 also up uh less than 1%.

00:23 Jared

So that is looking like very choppy action and I can extend this. Let me show you a year to day chart. You can see this choppiness goes all the way back to May. So the major indices have done nothing.

00:32 Jared

Meanwhile, we have seen this tremendous rotation happen this month. So, let’s take a look at the Magnificent 7, which have really perked up. This is a 10-day look. You can see they’re up 7% in July, and meanwhile, the semiconductors are off about 13 and a half%.

00:46 Jared

So, uh, I did I ran the numbers like a $1.8 trillion has gone into the Mag 7 in terms of market cap. 1.3, 1.4 trillion has been sucked out from the semiconductors. So kind of a wash, and that explains why the indices are going nowhere. Um, and that just brings us to the main point, which is earning season is upon us and I’m really looking ahead to those big tech earnings.

01:06 Jared

I think that’s going to be the major decision point and we’ll get we’re going to get a breakout eventually. Is it going to be to the upside or the downside? Only the future will tell here, Josh.