The Magnificent Seven — the grouping of major tech stocks Amazon ( AMZN ), Apple ( AAPL ), Alphabet ( GOOG , GOOGL ), Nvidia ( NVDA ), Meta Platforms ( META ), Microsoft ( MSFT ) and Tesla ( TSLA ) — had the day of their worst in more than a year, with Tesla snapping its 11-day winning streak after reports the company pushed back the date of the robotax’s unveiling. Additionally, retail investor money sitting on the sidelines has hit a record high, reaching over $2 trillion.
Yahoo Finance senior markets reporter Jared Blikre joins Asking For A Trend to break down the latest market trends for July 11.
For more expert insight and the latest market action, click here to watch this full episode of Searching for a Trend.
This post was written by Nicholas Jacobino
Video Transcript
Y finances.
Jared Blicker joins us now with more on trading tips.
Jared, what a day I’ll tell you that seven wizards were just defeated.
I’ll tell you how bad it was.
And then we can talk about what the future holds.
Uh, just to beat some stats.
And this is, uh, some of the biggest stocks in the world.
You see, in the video, they are down 5.5%.
That wasn’t the worst show today, by the way.
Some of the stats get really bad for mag seven.
All in all, this was the worst day in a year.
You have to go back to July of last year to see the red Tesla go on an 11-day winning streak.
Worst day since January 25th.
The second worst day of the year.
Apple snaps a seven-day streak.
Worst day since March 21.
Anyway, it goes on and on, and you can see where this is going.
So the bull market is over.
Throw it in the towel.
Last one out, they light up.
I’m going home now, but let me tell you what’s not true.
This is not true.
Um, there’s some green on the screen, not just Bitcoin.
Check out Berkshire.
Halfway 1%.
What is Berkshire OK?
They own Apple as their largest position, but this is a value firm.
Check out ExxonMobil’s energy in the green today.
I will tell you something that makes me very optimistic here.
And this is the Russell 2000.
It was such an interesting move to show you the day.
That’s what the Russell 2000 did.
Broke up.
And it just went higher on the day.
3.5% on a day when the NASDAQ 100 is negative by 2.24%.
I ran the stats the last time we had the NASDAQ 100 under 2% and the S and P, or excuse me, the Russell 2000/3 percent has happened once in history.
And it was November 2020.
And let me show you just one five.
Your chart so you can see where it was.
This is a NASDAQ 100.
I want to show you the Russell 2000 boom.
It was right there before takeoff.
So that makes me think, you know, the Russell 2000 has been stuck in this sideways range for quite some time.
Is this finally the catalyst, this inflation-friendly ratio that was needed to take it to new heights?
I will argue that all this rotation, we are calling it rotation for a reason.
People overinvested in mega caps because they were scared.
This is kind of a safety game, believe it or not.
And they have sold and are investing in the rest of the market.
So I think when they booked a little redistributed profit, I think it’s a healthy move here.
So I’m actually bullish on small caps going forward just because of this one-day price action, subject to immediate reversal if I see something different happen.
But that’s the way it works.
Modern technology.
Now, that’s a big picture.
The statement is bigger than the technology of the era.com.
We just had Ed Yarden on the show.
This is one of his tables.
This goes back to the mid-nineties, and it shows, uh, in purple.
That’s if you take the market capitalization of the technology sector plus communications services.
So you want to get some of the telecom or you want to get the alphabet and the meta in there as well, even though they didn’t exist at the time, Um, that’s how he’s building this.
So you have the technology and the technology down there.
They exceeded 40% of the market capitalization of the S and P five hundred.
Right now it is at 42%.
And so everybody says, OK, we saw what happened again at.com.
Will this happen?
How does this end?
Okay, 25 years ago.
This is very bad.
Exactly.
And what I like about it is that I look at Ford’s profits.
So Ford’s share of profits as a percentage of the S and P 500 for technology at the time was only about 20%.
Look where it is now.
It is much higher.
That’s because earnings are supporting this bigger and higher move in the stock prices of these tech stocks.
I showed this chart a few days ago.
These are just the S and P 500 earnings expectations.
They are now at a record high and what you want to see is that they have done nothing but go up since we saw the bull market start to turn on this chart.
That’s what happened here.
So I think the gas gains in the tank are enough to support a move higher.
All right, final third, Jared Blicker takes this one.
The money is on the side.
Wait.
Cash aside.
This is me getting one more record from Ed Yard.
Denny, that’s $2 trillion just for retail.
Institutional plus retail is six trillion.
Now, when the Fed starts lowering its rates, think about what happens to money market fund rates.
They also go down, closed in real time.
All that money, some of that money can move across borders, as it has done many times before.
Rate cuts are always good, Jared.
You know, lowering rates isn’t always good.
This is not true.
The point is, if you get if you get, um, a rate cut in response to this market moving disaster where the recession is finally pricing in and that’s another story.
But that is not what we are dealing with now.
We’ll say that for another reception.
Jared.
Thank you.
He killed it like always.
Thank you.