Invesco S&P 500 Equal Weight ETF (ARCA: RSP)

Ultime notizie per Invesco S&P 500 Equal Weight ETF (ARCA:RSP)

Invesco S&P 500 Equal Weight ETF

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The Fund generally will invest at least 90% of its total assets in securities that comprise the Underlying Index. The Underlying Index consists of all of the components of the S&P 500 Index (the Parent Index). The Parent Index is designed to measure the performance of equity securities of larger U.S.companies.

Mohawk Industries Inc.

Cco Holdings, Llc/ Cco Holdings Capital

Cbre Group Inc. Class A

Tesla, Inc.

Baker Hughes Co

3M Co.

Citizens Financial Group Inc.

D R Horton Inc

Truist Financial Corp

Stanley Black & Decker Inc.

Invesco Actively Managed Exchange-Traded Fund Trus Invesco S&P 500 Equal Weight Income Advantage ETF

Invesco S&P 500 Equal Weight Communication Services ETF

Invesco S&P 500 Equal Weight Consumer Discretionary ETF

Invesco ESG S&P 500 Equal Weight ETF

Invesco S&P 500 Equal Weight Financial ETF

Invesco S&P 500 Equal Weight Energy ETF

Invesco S&P 500 Equal Weight Health Care ETF

RESPIRERX PHARMA INC by RespireRx Pharmaceuticals Inc.

RespireRx Pharmaceuticals Inc

Invesco S&P 500 Equal Weight Materials ETF

Invesco S&P 500 Equal Weight Industrials Portfolio

Invesco S&P 500 Equal Weight Real Estate ETF

Invesco S&P 500 Equal Weight Consumer Staples ETF

Invesco S&P 500 Equal Weight Technology ETF

Invesco S&P 500 Equal Weight Utilities ETF

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Rydex ETF Trust Rydex S&P Equal Weight ETF

Elliott Investment Management 13F Shows Exited Position In Marathon Petroleum, Previously Holding 7,365,000 Shares; Ishares Biotechnology ETF Put Position, Previously Holding 2,800,000 Shares; Invesco S&P 500 Equal Weight ETF Put Position, Previously Holding 1,925,000 Shares; Vaneck Gold Miners ETF Put Position, Previously Holding 5,000,000 Shares; BHP Group Ltd Call Position, Previously Holding 2,500,000 Shares; MicroStrategy Convertible Note, Previously Holding $27.5 Million In Principal

On CNBC's &#8220;<a href="https://www.cnbc.com/video/2024/11/12/final-trades-invesco-sp-500-equal-weight-salesforce-inc-microsoft-and-target.html">Halftime Report Final Trades</a>,&#8221; Bill Baruch of Blue Line Capital picked Microsoft Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), expecting it to outperform the Nasdaq between now and the end of the year.
On Oct. 30, Microsoft reported first-quarter revenue of $65.60 billion, up 16% year-over-year. The total beat a Street consensus estimate of $64.51 billion according to data from Benzinga Pro. The company reported first-quarter earnings per share of $3.30, beating a Street consensus estimate of $3.09 per share.
Don't forget to check out our <a href="https://www.benzinga.com/premarket/">premarket coverage here</a>
Bryn Talkington of NewEdge Wealth named Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>) <a href="https://www.benzinga.com/quote/RSP">as her final trade</a>.
Rob Sechan of NewEdge Wealth picked Salesforce, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRM#NYSE">CRM</a>).
Salesforce will release its third quarter fiscal year 2025 results, after the closing bell on Tuesday, Dec. 3. Analysts expect the company to report quarterly earnings at $2.44 per share, up from $1.96 per share in the year-ago period. The company projects to report quarterly revenue of $9.34 billion.
Stephanie Link of Hightower said she expects a solid quarter from Target Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TGT#NYSE">TGT</a>).
On Oct. 22, Bernstein analyst Dean Rosenblum initiated coverage on Target with a Market Perform rating and announced a price target of $168.
Price Action:
<ul>
<li>Invesco S&amp;P 500 Equal Weight ETF fell 0.8% during Tuesday's session.</li>
<li>Salesforce shares fell 0.2% to settle at $341.15 during Tuesday's session.</li>
<li>Microsoft gained 1.6% during Tuesday's session.</li>
<li>Target shares gained 1.6% to close at $155.65 on Tuesday.</li>
</ul>
Check This Out: 
<ul>
<li><a href="https://www.benzinga.com/24/11/41899303/top-3-tech-and-telecom-stocks-which-could-rescue-your-portfolio-in-q4">Top 3 Tech And Telecom Stocks Which Could Rescue Your Portfolio In Q4</a></li>
</ul>
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MSFT

Microsoft, Salesforce, Target  And More On CNBC's 'Final Trades'

Analyst Ratings

CNBC Halftime Report Final Trades: Salesforce, Microsoft, Target, Invesco S&P 500 Equal Weight ETF

The idea of a "lost decade" for S&amp;P 500 returns in the next 10 years has gained traction after a bearish report from Goldman Sachs earlier in October, which predicted very subdued annual returns for U.S. stocks over the next decade and possible underperformance <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41431485/goldman-sachs-predicts-bleak-long-term-s-p-500-returns-as-market-concentration-hits">against other asset classes. </a>
This view, however, has sparked strong pushback from other prominent Wall Street voices, including analysts at Bank of America and veteran investor Ed Yardeni.
<h3 class="wp-block-heading">Goldman Sachs&#8217; Grim Outlook: Just 3% Annual Returns Ahead</h3>
Goldman Sachs recently forecasted that the S&amp;P 500, as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), will deliver an annualized nominal total return of just 3% over the next 10 years, placing this return scenario in the 7th percentile of historical outcomes since 1930. Adjusted for inflation, the real return would hover around 1% per year. 
According to Goldman, the S&amp;P 500 has a 72% probability of underperforming bonds and a 33% chance of lagging inflation through 2034.
David J. Kostin, chief U.S. equity strategist at Goldman Sachs, highlighted that extreme market concentration is a key factor weighing down their long-term outlook. Currently, the U.S. stock market is more concentrated in a few mega-cap tech names than at any point in the last century, which Kostin suggests could limit the broader market&#8217;s returns in the coming years.
<h3 class="wp-block-heading">Bank of America: A Case For Equal-Weighted Stocks And Dividend Reinvestment</h3>
While Bank of America's equity analyst Savita Subramanian acknowledged on Monday that the S&amp;P 500 is "statistically expensive," she indicated potential upside in the equal-weighted version of the index, tracked by the Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>).
The equal-weighted S&amp;P 500 currently trades at a &#8220;historic discount&#8221; to the traditional, cap-weighted index and could offer more attractive returns over the next decade, according to Subramanian.
Subramanian suggests that dividends could provide an overlooked source of gains for investors. 
&#8220;We may have forgotten about dividends because they did little for total returns in the past decade,&#8221; she said.
She highlighted that dividends historically contributed 40% of total returns before the period of low-interest rates prior to the pandemic. 
If dividend contributions revert to historical levels, Subramanian projects that the equal-weighted S&amp;P 500 could deliver an 8.3% total return annually, thanks in part to dividend growth from mature tech giants in the "Magnificent 7" that are now initiating dividend programs.
<h3 class="wp-block-heading">Ed Yardeni: Optimism For Earnings Growth And The &#8220;Roaring 2020s&#8221;</h3>
Veteran Wall Street strategist Ed Yardeni openly challenged Goldman's downbeat S&amp;P 500 long-term forecast. 
In a note published on Monday, Yardeni wrote, "We don't agree with [Goldman's recent depressing long-term prediction for S&amp;P 500 returns." 
Yardeni is forecasting annual earnings growth of at least 6% over the next decade, consistent with the S&amp;P 500's long-term historical average of 6.5%.
Yardeni also disputed Goldman's concerns about market concentration. While tech and communication services companies now account for roughly 40% of the S&amp;P 500—similar to their share during the dot-com bubble—he indicated that today's tech giants are financially stronger and more resilient than those in 2000.
While a &#8220;lost decade&#8221; for stocks isn&#8217;t unprecedented—the S&amp;P 500 remained flat for 10 years after peaking in April 2000, amid the dot-com crash and the Great Financial Crisis—the investor highlighted that S&amp;P 500 dividends still rose by 41% during that period.
If the conditions for a &#8220;Roaring 2020s&#8221; scenario take hold—marked by a productivity-driven economic boom fueled by technological advancements, with real GDP growth stabilizing around 3% annually and inflation at 2%—Yardeni forecasts an average annual total return of 11% for the S&amp;P 500 over the next decade.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41502146/30-year-treasury-yield-tops-4-50-raising-red-flags-for-markets-bond-vigilantes-are-">30-Year Treasury Yield Tops 4.50%, Raising Red Flags For Markets: &#8216;Bond Vigilantes Are Voting Early,&#8217; Says Veteran Investor</a></li>
</ul>
Photo: Shutterstock

Analyst Color

Equities

Broad U.S. Equity ETFs

Econ #s

Economics

Tech

ETFs

Is S&P 500 Headed For A Lost Decade? Analysts Say 'We May Have Forgotten About Dividends'

Goldman Sachs has issued a stark warning for U.S. equity investors, predicting significantly lower returns for the S&amp;P 500 over the next decade due to historically high <a href="https://www.benzinga.com/topic/magnificent-7">levels of market concentration. </a>
The firm's analysts, including David J. Kostin and Ben Snider, highlight that the current concentration in the U.S. stock market is the highest it has been in the past century, which they believe could weigh heavily on long-term index returns.
Market concentration currently ranks &#8220;near the highest level in 100 years,&#8221; analysts warned, adding that their &#8220;S&amp;P 500 baseline 10-year return forecast is lower than the estimates of other market participants.&#8221;&nbsp;
<h3 class="wp-block-heading">Long-Term Return Forecast: Only 3% Annually Over the Next Decade</h3>
Goldman Sachs forecasts that the S&amp;P 500 will deliver an annualized nominal total return of just 3% over the next 10 years—placing it in the 7th percentile of historical returns since 1930. Adjusting for inflation, the real return is expected to be around 1%. 
This projection stands in stark contrast to the past decade, where the S&amp;P 500 delivered a robust 13% annualized total return, placing it in the 58th historical percentile.
&#8220;The current extremely high level of market concentration is one of the main drags on our return forecast,&#8221; analysts wrote in their report.
If the current high level of market concentration were excluded from the model, the firm&#8217;s baseline forecast would improve by 4 percentage points, yielding a 10-year return estimate of 7%, which would rank in the 22nd historical percentile.
<h3 class="wp-block-heading">The Impact of Market Concentration on Returns</h3>
The extreme market concentration—driven by a handful of mega-cap companies like Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Microsoft Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NYSE">MSFT</a>), Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) and Alphabet Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>)—means that the performance of the S&amp;P 500 is increasingly dependent on the fortunes of a small number of firms. 
&#8220;When equity market concentration is high, the performance of the aggregate index is strongly dictated by the prospects of a few stocks,&#8221; Goldman Sachs explained.
Historically, it has been challenging for any firm to sustain high levels of sales growth and profitability over long periods. As growth decelerates for these market leaders, overall earnings growth for the index tends to slow down, pulling down returns.
Another major risk is government regulation, which has previously caused growth slowdowns for dominant firms.
Goldman Sachs highlighted historical examples where regulation led to a decline in market dominance:
<ul>
<li>International Business Machine Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBM#NYSE">IBM</a>): In 1969, IBM faced a government lawsuit that weighed on its valuations. Though the lawsuit was dropped in 1982, the company's growth slowed afterward.</li>
<li>AT&amp;T (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/T#NYSE">T</a>): The telecom giant faced a breakup order in 1982 following a lawsuit filed in 1974, which led to slower growth. However, AT&amp;T's valuations initially rose after the breakup.</li>
<li>Microsoft: In 1998, Microsoft faced antitrust lawsuits that led to a settlement in 2000. The tech giant's growth and valuations suffered for a significant portion of the following decade.</li>
</ul>
<h3 class="wp-block-heading">Equal-Weighted S&amp;P 500 Index May Outperform, Bonds To Pose A Growing Appeal</h3>
Given the risks of high market concentration, Goldman Sachs anticipates that the S&amp;P 500 equal-weighted index, which gives each stock the same weight regardless of size and is tracked by the Invesco S&amp;P 500 Equal Weighted ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>), could outperform the traditional market cap-weighted index (where larger companies have more weight) over the next decade. 
They estimate the equal-weighted index could surpass the cap-weighted index by an annualized margin of 200 to 800 basis points (2-8%).
Adding to the challenges facing the S&amp;P 500, Goldman Sachs predicts that stocks will face increasing competition from bonds in the years ahead. 
With the current 10-year U.S. Treasury yield around 4% and inflation expectations of 2.2% over the next decade, Goldman Sachs estimates that the S&amp;P 500 has a 72% probability of underperforming bonds over the next 10 years.
Furthermore, the analysts give the S&amp;P 500 a 33% chance of underperforming inflation during this period.
Read Now:
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41402089/goldman-sachs-highlights-20-top-short-squeeze-opportunities-for-q3-earnings-season">Goldman Sachs Highlights 20 Top Short-Squeeze Opportunities For Q3 Earnings Season</a></li>
</ul>
Image: Shutterstock

Large Cap

Bonds

Federal Reserve

AAPL

AMZN

GOOGL

NVDA

Goldman Sachs Predicts Bleak Long-Term S&P 500 Returns As Market Concentration Hits 'Highest Level In 100 Years'

Monday, Super Micro Computer, Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMCI#NASDAQ">SMCI</a>) stock gained after it announced a complete liquid cooling solution that includes powerful Coolant Distribution Units (CDUs), cold plates, Coolant Distribution Manifolds (CDMs), cooling towers, and <a target="_blank" href="https://www.benzinga.com/pressreleases/24/10/n41206584/supermicro-solidifies-position-as-a-leader-in-complete-rack-scale-liquid-cooling-solutions-current" rel="noreferrer noopener">end-to-end management software</a>.
Supermicro said it recently deployed over 100,000 GPUs with liquid cooling solution (DLC) for some of the largest AI factories ever built, as well as other Cloud Service Providers (CSPs).
Supermicro&#8217;s ultra-dense server with dual top-bin CPUs and 8 Nvidia Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) HGX GPUs in just 4U with liquid cooling quadruples the computing density, allowing organizations to run larger training models with a smaller data center footprint.
Also Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/10/41162435/supermicro-and-fujitsu-partner-for-ai-powered-server-whats-in-store" rel="noreferrer noopener">Supermicro And Fujitsu Partner For AI-Powered Server: What&#8217;s In Store?</a>
This complete solution reduces ongoing power costs, Day 0 hardware acquisition, and data center cooling infrastructure costs.
However, Supermicro stock has been under pressure since the U.S. Department of Justice started probing the company following an <a target="_blank" href="https://www.benzinga.com/news/24/09/41052423/super-micro-computer-stock-falls-on-report-of-doj-probe-what-to-know" rel="noreferrer noopener">August&nbsp;short report</a> from Hindenburg Research.
The short report highlighted allegations by former employee Bob Luong over the AI server company&#8217;s inappropriate revenue recognition policies and the re-hiring of employees the company had terminated due to involvement with past accounting violations.
Supermicro had inked a settlement with the SEC in 2020, paying $17.5 million without admitting or denying the accusations.&nbsp;
Needham analyst Quinn Bolton flagged Supermicro, a first mover in rack-level liquid cooling solutions, with its liquid cooling as an opportunity for further <a target="_blank" href="https://www.benzinga.com/news/24/09/40926422/super-micro-poised-for-expansion-as-gross-margin-concerns-ease-internal-control-risks-priced-in-anal" rel="noreferrer noopener">market share expansion</a>.
Bolton noted that the stock has priced in most of the risk associated with the&nbsp;board&#8217;s review of internal controls following the short report.
Supermicro stock is up 61% in the last 12 months. Investors can gain exposure to the stock through Vanguard Growth ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VUG#NYSE">VUG</a>) and Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>).
Price Action:&nbsp;SMCI stock is up 13.80% at $46.94 at the last check on Monday.
Also Read:
<ul>
<li><a href="https://www.benzinga.com/news/24/09/41012678/super-micro-unveils-next-gen-servers-powered-by-intels-latest-xeon-chips" target="_blank" rel="noreferrer noopener">Super Micro Unveils Next-Gen Servers Powered by Intel&#8217;s Latest Xeon Chips</a></li>
</ul>

Movers

SMCI

What's Going On With Super Micro Computer Stock On Monday?

Market strategist Jay Woods spoke with Benzinga ahead of Jerome Powell's<a href="https://www.benzinga.com/etfs/sector-etfs/24/08/40529209/jerome-powell-time-has-come-for-interest-rate-cuts-cooling-in-labor-market-unmistakable"> Jackson Hole speech Friday</a> to discuss a variety of topics: rate cuts, what the election means for stocks and <a href="https://www.benzinga.com/topic/small-caps">what's next for small caps</a>.
<h2 class="wp-block-heading">Fed Rate Cut</h2>
Woods says the Fed was late to raise rates and has been late to cut rates.
The <a href="https://www.benzinga.com/top-stories/24/08/40492530/fed-minutes-reveal-plausible-case-for-interest-rate-cut-as-policymakers-cheer-inflation-progress">expected rate cut </a>by the Federal Reserve in September comes as investors try to predict what will happen to the stock market — especially with the 2024 presidential election playing out before the end of the year.
The market has not had an August/September stretch-up in the past three years, Woods said, adding that he doesn't believe it will happen by the end of September.
"Most markets bottom in October," Woods said on the Aug. 22 edition of <a href="https://www.benzinga.com/premarket-prep">PreMarket Prep</a>.
When asked about the likelihood of a rate cut, Woods said there is 0% chance of no cut and that a cut should've already happened. He predicts the rate cut will more than likely be 25 basis points. A 50-point cut could play out too aggressively as a political move.
"Whatever happens, one side of the aisle is going to condemn him for cutting,&#8221; he said. 
The question for investors, Woods said, is if the rate cut is &#8220;already baked into stock prices.&#8221; 
&#8220;We already bought the rumor,&#8221; he added, citing how the other side of the popular phrase is &#8220;sell the news&#8221; and that's what might happen first.
Smart investors who bought the dip on Aug. 5 may want to lighten up as the market could get choppy and trade sideways, he warned. "I don't expect us to explode upward immediately on that initial rate cut on the 18th."
See below.
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<iframe loading="lazy" title="Jay Woods, CMT - Fed Rate Cuts" width="500" height="281" src="https://www.youtube.com/embed/emvAQLsC86k?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
</div>
</figure>
<h2 class="wp-block-heading">Small Cap Rally</h2>
Woods said when rates are cut in a non-recession time, the market typically rallies three months later, six months later and 12 months later.
One investment idea that often does well is small caps, an idea that Woods has been pounding the table on and shared <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/24/07/39846454/exclusive-market-strategist-jay-woods-says-rotation-in-small-caps-is-just-starting-rus">with Benzinga previously.</a>
Woods said small-cap stocks, which are commonly tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) have yet to make their all-time highs again.
"When they move, they move quickly," Woods said. Recall how small caps moved up 27% from October to December in 2023.
"The setup is there for small caps,&#8221; he added.
The past month has seen consumer staples and utilities outperform the magnificent seven stocks with the equal weight S&amp;P 500, which is tracked by the Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>), outperforming the S&amp;P 500, which is tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>).
"This is healthy, but it's not sexy."
Read Also: <a href="https://www.benzinga.com/etfs/sector-etfs/24/08/40515453/exclusive-trump-or-harris-12-stocks-2-etfs-could-win-no-matter-whos-president-says-market-strate">EXCLUSIVE: Trump Or Harris? 12 Stocks, 2 ETFs Could Win No Matter Who&#8217;s President, Says Market Strategist</a>
Past Election Year Trends: Woods said he took a look at the 2016 and 2020 years to predict what happens in 2024, with 2020 having an outlier in the COVID-19 pandemic.
The Volatility Index, commonly referred to as the VIX, spiked early in both years and then again in September before the election.
"Headlines are going to cause a little angst," Woods said.
Woods recalled that both the 2016 and 2020 elections, each one involving Trump, were controversial.
"We rallied from Election Day into the end of the year," Woods said for 2016 and 2020 with Trump involved in both cases. "I think the setup is there."
SPY, IWM Price Action: The SPDR S&amp;P 500 ETF Trust is up 1% to $559.31 on Friday.
The iShares Russell 2000 ETF is up 3% to $219.69 on Friday.
Watch the full interview with Jay Woods on<a href="https://www.youtube.com/watch?v=vGXosi2hWTQ"> PreMarketPrep here</a>.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/exclusives/24/07/39886192/exclusive-tesla-an-elon-musk-and-a-technology-story-first-ev-story-last-market-strategist-explains-w">EXCLUSIVE: Tesla &#8216;An Elon Musk And A Technology Story First, EV Story Last&#8217; — Market Strategist Explains Why To Buy The Stock</a></li>
</ul>

Exclusives

EXCLUSIVE: Market Strategist On Small Cap Rally, Election Year, Fed Cuts And What's Next – 'I Think The Setup Is There'

Consumer price index data this week provided encouraging signs that American inflation is moving ever closer to the Federal Reserve&#8217;s <a href="https://www.benzinga.com/government/24/06/39470021/janet-yellen-says-inflation-to-come-down-to-feds-2-target-by-2025-dismisses-possibility-of-us-recess">much-discussed 2% target</a>.
This fueled speculation <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39728268/inflation-slows-more-expected-to-3-in-june-heightens-expectations-for-rate-cuts-t">about interest rate cuts.</a>
The annual inflation rate dropped more than expected to 3% in June 2024, reaching its lowest level since March 2021. Remarkably, the monthly inflation rate showed a contraction of 0.1% for the first time since May 2020.
Investors and economists increased their convictions on the Fed's readiness to cut <a href="https://www.benzinga.com/general/politics/24/07/39731800/biden-cheers-inflation-progress-rate-cut-chorus-grows-louder-among-5-economists-this-is-just-wha">interest rates in September</a>, pushing market-implied odds of a cut to over 90%.
A <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39748331/june-producer-inflation-exceeds-forecasts-restrains-investor-euphoria-following-c">higher-than-expected producer inflation</a> data report Friday did little to alter these expectations significantly, as the <a href="https://www.benzinga.com/markets/equities/24/07/39750466/us-consumer-morale-dips-more-than-expected-in-july-sentiment-remains-stubbornly-subdued">latest consumer sentiment report</a> from the University of Michigan confirmed subdued morale and a decline in inflation expectations.
In the markets, sectors previously impacted by high interest rates — and have not yet priced in potential reductions in borrowing costs — outperformed the tech sector, which had already largely <a href="https://www.benzinga.com/markets/asia/24/07/39733667/inflation-data-sparks-rush-for-gold-real-estate-treasuries-yen-traders-see-september-rate-cut-as-don">anticipated such rate cuts.</a>
The equal-weight S&amp;P 500, as tracked by the Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>) outpaced the cap-weighted S&amp;P 500, monitored through the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), while value stocks outperformed their growth counterparts. 
Both the real estate sector — as tracked by the Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) – and the Russell 2000 small-cap index — as replicated by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) – achieved their strongest week of the year.
Chart Of The Week: Russell 2000 Enjoyed Strongest Week Since October 2023
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="488" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-1024x488.png" alt="" class="wp-image-434055" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-1024x488.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-300x143.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-768x366.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17-1536x732.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/12143443/image-17.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
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Rare Market Dynamic: On Thursday, the Russell 2000 surged 3.63% while the Russell 1000 large-cap index fell 0.66% — the fifth time in history that the performance difference between the two indexes exceeded 4%. It has previously occurred during major market downturns. This time it came near an all-time high <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39739225/the-market-did-something-today-that-has-only-occurred-4-times-in-history">for the S&amp;P 500.</a>
Weight-Loss Pill: Pfizer Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PFE#NYSE">PFE</a>) announced advancements in its once-daily weight-loss pill, danuglipron, showing a favorable pharmacokinetic and safety profile. The pharma giant plans to conduct dose optimization <a href="https://www.benzinga.com/general/biotech/24/07/39730398/pfizer-advances-once-daily-weight-loss-pill-as-it-catches-up-to-tap-the-lucrative-market">studies in late 2024.</a>
Tech Stock Poll: Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Microsoft Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NYSE">MSFT</a>), Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) and Alphabet Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>) all hit 52-week highs. A Benzinga poll reveals investor preferences:
<ul>
<li>Microsoft led with 32%</li>
<li>Apple at 29%</li>
<li>Google at 23%,</li>
<li>Meta at 16%. </li>
</ul>
Investors cited artificial intelligence growth potential and valuations as key <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/24/07/39716688/apple-microsoft-meta-google-which-would-you-buy-at-all-time-high-investor-poll-reveals">factors influencing their choices</a>.
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Image: Shutterstock

Sector ETFs

Small Cap

XLRE

Inflation Drop Fuels Rate Cut Speculation, Investors Shift To Sector Laggards, Russell 2000 Surges Over 3.6%: This Week In The Markets

Joshua Brown of Ritholtz Wealth Management named Pfizer Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PFE#NYSE">PFE</a>) as his final trade on the latest edition of CNBC's &#8220;<a href="https://www.cnbc.com/video/2024/07/11/final-trades-pfizer-l3harris-tech-the-rsp-and-gdx.html">Halftime Report Final Trades</a>.&#8221; 
On Thursday, Pfizer announced it will advance the development of Danuglipron. The company selected the once-daily weight loss drug for continued advancement based on an <a href="https://www.benzinga.com/news/24/07/39736144/why-pfizer-stock-is-moving-higher-on-thursday">ongoing pharmacokinetic study</a>.
"Obesity is a key therapeutic area for Pfizer, and the company has a robust pipeline of three clinical and several pre-clinical candidates," said Mikael Dolsten, chief scientific officer &amp; president, Pfizer Research and Development.
Bryn Talkington of Requisite Capital Management picked Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>). &#8220;I think the market will continue to <a href="https://www.benzinga.com/quote/RSP">broaden out,&#8221; she added</a>.
Bill Baruch of Blue Line Capital named VanEck Gold Miners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GDX#NYSE">GDX</a>) as his final trade.
Don't forget to check out our <a href="https://www.benzinga.com/premarket/">premarket coverage here</a>
Stephanie Link of Hightower picked L3Harris Technologies, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LHX#NYSE">LHX</a>) as her final trade.
L3Harris Technologies is scheduled to release its second quarter 2024 financial results on Thursday, July 25, after the closing bell. Analysts expect the company to report quarterly earnings at $3.16 per share, up from $2.97 per share in the year-ago period. The company is projected to post quarterly revenue of $5.29 billion, compared to $4.37 billion <a href="https://www.benzinga.com/quote/LHX/earnings">in the year-earlier quarter.</a>
Price Action:
<ul>
<li>L3Harris Technologies shares gained 1.4% to close at $230.34 on Thursday.</li>
<li>Invesco S&amp;P 500 Equal Weight ETF rose 1.2% during Thursday's session.</li>
<li>VanEck Gold Miners ETF gained 2.8% on Thursday.</li>
<li>Pfizer shares gained 1.1% to close at $28.66 during Thursday's session.</li>
</ul>
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<li><a href="https://www.benzinga.com/news/earnings/24/07/39743368/s-p-500-falls-following-june-inflation-data-fear-greed-index-moves-to-neutral-zone">S&amp;P 500 Falls Following June Inflation Data: Fear &amp; Greed Index Moves To &#8216;Neutral&#8217; Zone</a></li>
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Pfizer, L3Harris Technologies And More: CNBC's 'Final Trades'

CNBC Halftime Report Final Trades: Pfizer, L3Harris Technologies, VanEck Gold Miners ETF, Invesco S&P 500 Equal Weight ETF

The rise <a href="https://www.benzinga.com/topic/meme-stocks">of meme stocks</a> in recent years has led to more investing education — and some investors realizing they need to diversify.
What Happened: Benzinga founder and Chairman <a href="https://x.com/JasonRaznick">Jason Raznick</a> shared his take on <a href="https://www.benzinga.com/general/gaming/23/01/30412695/gamestop-short-squeeze-anniversary-a-look-back-at-david-vs-goliath-battle-and-whats-next">how meme stocks</a> have changed the markets during an interview on the Schwab Networks' "Market On Close" Tuesday.
The COVID-19 pandemic saw an influx of new retail traders get involved in the markets, which then shifted to the meme stock craze later, Raznick said. 
On Benzinga, content would often center on stocks like GameStop Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GME#NYSE">GME</a>), he said, recalling that some readers would get mad when news like downgrades on the stock or caution around investing in meme stocks was shared.
The caution around meme stocks came out of the history of dot-com stocks and investors getting wiped out, Raznick <a href="https://schwabnetwork.com/">said</a>.
"I didn't want to lose a generation of investors."
Many companies that had IPOs during the dot-com period went bankrupt, the Benzinga founder said. Investors didn't leave the markets after meme stocks, which may have been due to education and diversification efforts, he said. 
More investors are looking at index funds and not just individual stocks on Benzinga, Raznick said. 
"If this is your life savings, [it] doesn't make sense to be all in one stock."
The Benzinga founder said it's the story that often drives meme stocks like GameStop, AMC Entertainment Holdings (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AMC#NYSE">AMC</a>) and Chewy Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CHWY#NYSE">CHWY</a>).
"There's no technicals to help explain these things,&#8221; Raznick said, adding that with some meme stocks, "the story sounds so good.&#8221;
Read Also: <a href="https://www.benzinga.com/news/24/03/37514201/innovation-risk-and-growth-lessons-in-entrepreneurship-from-benzingas-co-founder-jason-raznick">Innovation, Risk And Growth: Lessons In Entrepreneurship From Benzinga&#8217;s Co-Founder Jason Raznick</a>
What's Next: Schwab Network host Oliver Renick asked if the meme stock craze was a net positive: lots of people made money, but investors also lost money.
"I think it's a net positive, but close to being a net negative," Raznick said.
One positive that came out of meme stocks was retail traders learning from social media and other investors to not put all their eggs in one basket, and to diversify.
Raznick spoke of caution and diversification when it comes to the S&amp;P 500, which is tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>).
The Magnificent Seven stocks make up a large portion of the index and tracking ETFs, and Raznick said that if those stocks fall, "the index gets killed."
Raznick said he has been diversifying by buying equal-weighted S&amp;P 500 ETFs. Schwab&#8217;s Renick named the Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>) as one option available for investors.
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CHWY

Benzinga Founder Jason Raznick On Meme Stocks, Importance Of Diversification: 'Didn't Want To Lose A Generation Of Investors'

The second quarter is projected to be the first in which the &#8220;Other 493&#8221; companies — those outside the &#8220;Magnificent 7&#8221; tech giants — will exhibit earnings growth after five quarters <a href="https://www.benzinga.com/earnings#:~:text=The%20time%20period%20that%20corresponds,%2C%20June%2C%20September%20and%20December.">of stagnation or decline.</a> 
This development could broaden market gains as tech sector growth slows, according to Bank of America.
Bank of America&#8217;s analysts, Ohsung Kwon, CFA and Savita Subramanian, presented a more conservative outlook on Q2 earnings for U.S. companies compared to consensus estimates. 
While the consensus expects earnings per share (EPS) to rise by 9% year-over-year in Q2, the analysts anticipate a 2% beat which aligns with historical averages but is the smallest since Q4 2022. 
Behind the weaker-than-expected forecasts, analysts cited the weak macroeconomic data last quarter.
&#8220;Economic Surprise Index&nbsp;is at the lowest level since June 2015.&nbsp;The historical relationship points to a&nbsp;3% EPS&nbsp;miss,&#8221; Bank of America wrote. 
<h3 class="wp-block-heading">&#8216;Magnificent 7 vs. The Other 493&#8217;</h3>
The Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>) has underperformed the cap-weighted SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) by approximately 13 percentage points year-to-date. This gap widens significantly when comparing the broader market with the Magnificent 7, as tracked by the Roundhill Magnificent Seven ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MAGS#NYSE">MAGS</a>), as illustrated in the chart below from Benzinga Pro.
This trend could potentially be halted in the upcoming weeks. As the tech sector&#8217;s rapid growth begins to decelerate, the broader market, represented by the &#8220;Other 493&#8221; companies, is poised for earnings growth, according to Bank of America. 
<figure class="wp-block-image size-large"><a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent070924&amp;t=be2bearmibe3na1"><img loading="lazy" decoding="async" width="1024" height="544" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/09141136/image-14-1024x544.png" alt="" class="wp-image-427078" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/09141136/image-14-1024x544.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/09141136/image-14-300x159.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/09141136/image-14-768x408.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/09141136/image-14-1536x816.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/09141136/image-14.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure>
&#8220;2Q is expected to&nbsp;be&nbsp;the first&nbsp;EPS&nbsp;growth quarter for the Other 493&nbsp;since 4Q22, whereas growth for the Magnificent 7 is expected to slow for the second straight quarter and again in 3Q,&#8221; analyst wrote.
The Magnificent 7&#8217;s earnings recovery began earlier because they entered an earnings recession in the second half of 2022. This prompted tech companies to implement cost-cutting measures sooner, resulting in an earlier recovery, Bank of America explained.
Year-to-date, tech layoffs have significantly decreased, while layoffs outside the tech sector have increased, indicating more cost-cutting opportunities in non-tech industries. 
These efforts are expected to enhance margins for the &#8220;Other 493&#8221; in 2024-25.
<h2 class="wp-block-heading">&#8216;Virtuous Cycle&#8217; From AI Investments</h2>
A virtuous cycle appears to be forming from AI investments. Major tech companies — Microsoft Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Alphabet Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>) and Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) — confirmed last quarter that 2024 is set to be the first year of a multi-year AI investment cycle. The consensus capex forecast for these companies increased by $18 billion during Q1 earnings season to approximately $200 billion, a 34% year-over-year rise.
Historically, companies in reinvestment cycles underperform, but AI investments could create a virtuous cycle. 
Semiconductor &#8220;are the most obvious beneficiaries,&#8221; Bank of America highlighted. Yet, the rising power consumption from AI and the construction of data centers are anticipated to boost demand for electrification, construction, utilities, and commodities, ultimately creating more jobs.
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Image: Shutterstock

MAGS

'The Other 493' Set To Grow More Than 'Magnificent 7' This Earnings Season: Bank Of America

The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) is up over 3.5% in the last 30 days, an impressive feat amid <a href="https://www.benzinga.com/top-stories/24/07/39652831/whartons-jeremy-siegel-implores-jerome-powell-to-signal-september-rate-cuts-we-are-in-a-slowing-econ">signs of slowing</a> in the U.S. economy. Despite investor optimism, only 17% of S&amp;P 500 components have outperformed the index in the past month, a historic low.
The Data: A <a href="https://x.com/KobeissiLetter/status/1810332300766228769">post</a> on X relayed data from The Compound News.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">How concentrated has this market become? Just 17% of S&amp;P 500 stocks have outperformed the index over the last 30 days, the lowest share in at least a decade. In other words, only 85 stocks in the S&amp;P 500 have had higher returns than the index itself over the last month. By… <a href="https://t.co/ETPAG2ZCi3">pic.twitter.com/ETPAG2ZCi3</a>
&mdash; The Kobeissi Letter (@KobeissiLetter) <a href="https://twitter.com/KobeissiLetter/status/1810332300766228769?ref_src=twsrc%5Etfw">July 8, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
According to the data, just 17% of S&amp;P 500 members — approximately 85 companies — outperformed the overall index in the past 30 days. The 10-year average for overperformance is 49%, far above today&#8217;s figure.
This is the lowest number for 30-day outperformance in at least a decade. The figure reached above 50% for extended periods in mid-to-late 2022, late 2023 and early 2024.
Tesla Inc, Adobe Inc., Apple Inc and Amazon.com Inc are among the few companies to outperform the index, according to <a href="https://benzinga.com/pro">Benzinga Pro</a>. Nike Inc, Danaher Corp and CVS Health Corp are a few of the biggest underperformers.
Why it Matters: The data reflects the fact that just a few technology-focused stocks have a historically outsized impact on the market. Big Tech has outperformed companies in other industries.
High concentration is a double-edged sword: while investors with S&amp;P 500 exposure stand to benefit even more from tech&#8217;s continued rally, they also face increased risk if the market sours on the tech play. <a href="https://www.goldmansachs.com/intelligence/pages/is-the-sp-too-concentrated.html">According</a> to Goldman Sachs Research, the S&amp;P 500 has historically rallied in the year following periods of peak concentration.
There are some concerns that the standard S&amp;P 500 has become overvalued compared to its more diversified, Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>) counterpart.
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Photo: Shutterstock

Just 17% Of S&P 500 Stocks Outperform The Index: What Does That Mean For The Market?

One of the most hawkish investment firms on Wall Street might soon revise its estimates and anticipate an earlier rate cut from the Federal Reserve if June&#8217;s new inflation figures confirm another unmistakable signal of a return <a href="https://www.benzinga.com/topic/inflation">towards the 2% target.</a>
Despite recent benign inflation reports, Bank of America still maintains its call for rate cuts to begin no earlier than December 2024. This stance, which contrasts sharply with the current market pricing seeing a 76% chance of cuts starting as early as September, may be softened after the upcoming Consumer Price Index (CPI) report on Thursday.
&#8220;We expect the June CPI report to be another confidence builder following the undeniably good May report,&#8221; wrote economist Michael Gapen in a recent note.
<h1 class="wp-block-heading">June CPI Projections</h1>
Bank of America forecasts the headline CPI to have risen by 0.1% month-over-month, partly due to another drop in energy prices. This would result in the year-over-year rate falling by a tenth to 3.2%. 
Analysts expect core CPI to have increased by 0.2% month-over-month. 
&#8220;While this is not quite as low as May, it would be a good print for the Fed,&#8221; Gapen added.
The key driver of the forecasted acceleration in core CPI relative to May is core services excluding rent and owner&#8217;s equivalent rent (non-housing services). 
This aggregate category surprisingly edged down in May, largely due to a slight decline in motor vehicle insurance. For June, however, increases in motor vehicle insurance and non-housing services are expected. 
Non-housing services inflation should moderate over time given cooling services wage inflation; however, a sustained period of deflation is unlikely.
Aside from services, core goods prices are expected to have fallen for a fourth consecutive month, partly due to another decline in new vehicle prices. Inventories of new vehicles continue to climb, leading to greater use of incentives by manufacturers. 
Beyond this month, upside risks to core goods through higher shipping costs are seen. However, with demand cooling, it may be harder to pass these costs onto consumers.
<h1 class="wp-block-heading">Implications for Fed Policy</h1>
Should the CPI report print in line with Bank of America&#8217;s expectations, the firm would maintain its expectation for the Fed to start its cutting cycle in December. 
That said, another 0.2% month-over-month print for core CPI would tilt the risk towards an earlier cut, especially given signs of softening activity.
<h1 class="wp-block-heading">Analysts Maintain Positive View On Stocks</h1>
Bank of America technical analysts continue to hold a bullish view on U.S. equities. 
The S&amp;P 500 (SPX), S&amp;P 100 (SP. SP100), NASDAQ 100 and NASDAQ Composite (CCMP) have all soared to new all-time highs in early July, signaling robust market confidence and momentum. However, not all indices are sharing in the celebration. The Russell 2000, as tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>),
Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>) and the SPDR Dow Jones Industrial Average (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) continue to lag, falling short of reaching new peaks.
Even these laggards have constructive absolute chart patterns that support the case for higher highs, but they need to join the SPX at new highs to confirm a healthy summer rally for U.S. equities.
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<li><a href="https://www.benzinga.com/markets/equities/24/07/39666482/french-luxury-stocks-fall-as-tax-concerns-rise-after-left-wing-election-upset-a-left-government-">French Luxury Stocks Fall As Tax Concerns Rise After Left-Wing Election Upset: &#8216;A Left Government Might Pose Challenges For Billionaire Owners&#8217;</a></li>
</ul>

Photo: Shutterstock

SPDR Dow Jones Industrial Average ETF Trust

If June Inflation Report Is 'Another Confidence Builder,' Fed Rate Cut Will Come Next: Bank Of America

Artificial intelligence has captivated the financial markets and sent the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) into an upward spiral. Even though the S&amp;P 500 is up over 15% through the first half of 2024, only a few firms have reaped <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39484650/microsofts-generative-ai-push-significantly-outpacing-azure-investments-goldman-sac">generative AI&#8217;s benefits</a>.
The Data: A <a href="https://x.com/MikeZaccardi/status/1808132089104961977">post</a> on X relayed data from Goldman Sachs.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Approximately 5% of US Firms Are Using Generative AI to Produce Goods and Services <a href="https://t.co/JSoLlmXTuo">pic.twitter.com/JSoLlmXTuo</a>
&mdash; Mike Zaccardi, CFA, CMT &#x1f356; (@MikeZaccardi) <a href="https://twitter.com/MikeZaccardi/status/1808132089104961977?ref_src=twsrc%5Etfw">July 2, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
<figcaption class="wp-element-caption">Despite the market&#8217;s hype, only 5% of U.S. firms are actually using generative AI. The figure is up slightly from October 2023 and is projected to increase to about 6% by the end of 2024. The note compiled data from a list of industries, some including: </figcaption></figure>
<ul>
<li>Information companies: 15% of firms use GenAI. Projected to grow to over 20% by year-end.</li>
<li>Professional, scientific and technical companies: Around 12% of firms use GenAI. Projected to grow to over 15% by year-end.</li>
<li>Education companies: Around 6% use GenAI. Projected to grow to 12% by year-end.</li>
<li>Finance and insurance companies: Around 5% use GenAI. Projected to grow to 10% by year-end.</li>
<li>Health care companies: Around 5% use GenAI. Projected to grow to over 6% by year-end.</li>
<li>Construction companies: Around 4% use GenAI. Projected to grow to 5% by year-end.</li>
</ul>
Why it Matters: The data is consistent with the narrative that large information technology companies use generative AI substantially more than any other industry.
While the S&amp;P 500 is up over 15% in 2024, the Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>) is up under 4%, indicating that just a few large tech companies have moved the needle in the broader S&amp;P 500. The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) is up just 1% year-to-date.
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<li><a href="https://www.benzinga.com/startups/24/07/39619831/elon-musk-predicts-jobs-will-become-obsolete-but-he-foresees-a-high-universal-income-that-acts-as-an">Elon Musk Predicts Jobs Will Become Obsolete — But He Foresees A &#8216;High Universal Income&#8217; That Acts As An Equalizer</a></li>
</ul>

Photo: Shutterstock

Despite The Market Hype, Only 5% Of US Firms Use Generative AI In Production

As the S&amp;P 500 and Nasdaq 100 indices continue to notch <a href="https://www.benzinga.com/top-stories/24/06/39383798/the-ai-big-10-10-ai-stocks-now-comprise-28-of-s-p-500-up-from-14-in-2023">new all-time highs</a>, it&#8217;s clear that the rising tide has not lifted all boats.
Sharp-eyed analysts and investors have noted some discordant features in a stock market at its peak, raising questions about the euphoria that currently reigns <a href="https://www.benzinga.com/markets">supreme on Wall Street.</a>
<h2 class="wp-block-heading">Mega-Cap Dominance Unprecedented Since Late 2008</h2>
The dominance of mega-cap stocks hasn&#8217;t been this pronounced in nearly sixteen years. 
The top 100 U.S. stocks by market capitalization, monitored through the iShares S&amp;P 100 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OEF#NYSE">OEF</a>), have never been stronger against the Russell 1000 Index, as tracked by the iShares Russell 1000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWB#NYSE">IWB</a>), since December 2008-.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="500" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142746/image-47-1024x500.png" alt="" class="wp-image-397825" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142746/image-47-1024x500.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142746/image-47-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142746/image-47-768x375.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142746/image-47-1536x750.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142746/image-47.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
David Morrison, senior market Analyst at Trade Nation, commented, &#8220;There are concerns about the US market's lack of breadth with so much of the overall performance concentrated in the stock price of a few corporations. In fact, the five biggest companies by market capitalization in the S&amp;P 500 account for nearly 30% of its value. The size and outperformance of this select group is reflected in its valuation, which is way above that of the rest of the constituents.&#8221;
<h2 class="wp-block-heading">Poor Participation In Market Rally</h2>
The current bull market rally lacks broad participation, with only a few companies driving the major indices higher.
The cap-weighted S&amp;P 500 Index, tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), has surged to levels last seen in November 2008 when compared to its equally-weighted counterpart, represented by the Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>).
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="500" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141510/image-44-1024x500.png" alt="" class="wp-image-397797" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141510/image-44-1024x500.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141510/image-44-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141510/image-44-768x375.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141510/image-44-1536x750.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141510/image-44.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
&#8220;We haven't had a four-week span where the US stock market has gone up so much with so many stocks within the market going down, based on data going back to 2002,&#8221; said Luke Kawa, markets editor at Sherwood.
SentimenTrader in a post on social media X, indicates that while the Nasdaq 100 continues to achieve record highs, many of its constituent stocks are underperforming, dropping to monthly, quarterly, or even yearly lows and falling below their 10-, 50-, and 200-day moving averages. 
&#8220;This is not normal. In fact, it&#8217;s never happened before to this degree. There is a possibility that the average stock will catch up to the index, that is not how things usually pan out. Almost never, in fact. Risk is high in that index,&#8221; they wrote.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">The Nasdaq 100 continues to notch record high after record high. Many of its stocks are not only lagging, but they&#39;re falling to monthly, quarterly, or even yearly lows and below their 10-, 50-, and 200-day moving averages. This is not normal. In fact, it&#39;s never happened before… <a href="https://t.co/gopsw8WUJn">pic.twitter.com/gopsw8WUJn</a>
&mdash; SentimenTrader (@sentimentrader) <a href="https://twitter.com/sentimentrader/status/1802687052724527265?ref_src=twsrc%5Etfw">June 17, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
<h2 class="wp-block-heading">Tech Supremacy Surpassing Historical Extremes</h2>
The tech sector has been the primary driver of the extreme relative valuations among major U.S. stock indices. 
The Nasdaq 100, when compared to both the Dow Jones Industrial Average and the Russell 2000, is at historic highs, surpassing previous peaks seen during the dot-com bubble and in December 2021 at the end of the ultra-low interest rate era.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="500" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141752/image-45-1024x500.png" alt="" class="wp-image-397801" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141752/image-45-1024x500.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141752/image-45-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141752/image-45-768x375.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141752/image-45-1536x750.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20141752/image-45.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="500" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142011/image-46-1024x500.png" alt="" class="wp-image-397808" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142011/image-46-1024x500.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142011/image-46-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142011/image-46-768x375.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142011/image-46-1536x750.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/20142011/image-46.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Read now: <a href="https://www.benzinga.com/government/24/06/39400726/us-budget-crunch-cbo-warns-federal-interest-costs-now-higher-than-defense-spending-deficits-to-remai">US Budget Crunch: CBO Warns Federal Interest Costs Now Higher Than Defense Spending, Deficits To Remain Above 5.5% Until 2034</a>
Image created using artificial intelligence via Midjourney.

Mid Cap

Currency ETFs

5 Charts Expose Troubling Weaknesses In Record-High Stock Market: 'This Is Not Normal'

To gain an edge, this is what you need to know today.
<img alt="" src="https://thearorareport.com/wp-content/uploads/2024/06/2024-06-17_08h34_23.png" style="height:360px; width:700px" />
<h3>Pay Attention To The Average Stock</h3>
Please <a href="https://thearorareport.com/chart-analysis-stock-market-nvidia-driving-rally-copper-trade-rsp-nvda-spy-mc-06172024">click here</a> for an enlarged chart of SPDR S&amp;P 500 ETF Trust (ARCA:SPY) which represents the benchmark stock market index S&amp;P 500 (SPX).
Note the following:
<ul>
<li>The chart shows SPY compared to Invesco S&amp;P 500 Eql Wght ETF (ARCA: RSP) and NVIDIA Corp (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nvda#NASDAQ">NVDA</a>).&nbsp;SPY is cap weighted.</li>
<li>The chart shows that SPY has gained 2.6% over the last 30 days while RSP has lost 2.45%.</li>
<li>The chart shows that NVDA has gained 39.76% during the same period.</li>
<li>Make no mistake, it is an NVDA rally, taking along other AI stocks.&nbsp;However, the average stock is doing poorly.</li>
<li>History teaches that it is not prudent to become overly aggressive when the average stock is doing poorly.&nbsp;&nbsp;</li>
<li>As full disclosure, members and readers of The Arora Report are long NVDA stock from $12.55.&nbsp;The Arora target is $163 -&nbsp; $172.</li>
<li>The Arora Report was bullish on AI and NVDA before almost anyone else.&nbsp;Having said that, an important data point is that the most often asked question we get now is from investors wanting to jump on the bandwagon and buy NVDA stock now.&nbsp;Based on the history of the questions we have received over a long time, this indicates extreme bullish sentiment on NVDA stock.&nbsp;Consider the following:
<ul>
<li>Extreme bullish sentiment is a contrary signal.&nbsp;It is worth a reminder that sentiment is not a precise timing indicator.</li>
<li>Analysts who have been bullish on NVDA stock from much lower prices are not recommending jumping on the NVDA bandwagon now.</li>
<li>Analysts who totally missed NVDA&rsquo;s rise are now jumping in, recommending their followers to go all in on NVDA.</li>
<li>The recent rise in NVDA is mostly driven by retail investors.</li>
<li>Historically, retail investors tend to be wrong at turning points.</li>
<li>Technically NVDA is very overbought.</li>
</ul>
</li>
<li>Investors should remember two historical factors:
<ul>
<li>Analysts are expecting NVDA to grow 70% per year over the next five years.&nbsp;This is something that no large cap U.S. stock has ever accomplished in the entire market history.</li>
<li>Out of the ten most popular stocks in 1988 that retail investors were rushing headlong to buy, eight no longer exist. The only two that still exist are IBM Common Stock&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ibm#NYSE">IBM</a>) and General Electric Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ge#NYSE">GE</a>).</li>
</ul>
</li>
<li>Prudent investors who do not already own NVDA stock may consider buying on a dip in the Arora buy zone.</li>
<li>The Fed&rsquo;s Kashkari said that the Fed can take its time before cutting rates.</li>
<li>More Fed speak is ahead that may be market moving.</li>
<li>The U.S. economy is 70% consumer based.&nbsp;Therefore, prudent investors pay attention to retail sales.&nbsp;All important retail sales data will be released tomorrow at 8:30am ET.</li>
</ul>
<h3>Red Hot Copper Trade</h3>
The AI driven red hot copper trade is getting hurt on data from China.&nbsp;Here are the two pieces of data from China that are hurting copper:
<ul>
<li>House prices declined by 3.9% year-over-year.</li>
<li>Industrial production grew by 5.6% year-over-year vs. 6.2% consensus.</li>
</ul>
<h3>Europe</h3>
There were early gains in Europe as investors bought on Marine Le Pen&rsquo;s statement that she would cooperate with President Macron and respect political institutions.&nbsp;However, the rally was met with selling, causing gains to mostly disappear
<h3>Magnificent Seven Money Flows</h3>
In the early trade, money flows are positive in Apple Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>) and Nvidia (NVDA).
In the early trade, money flows are neutral in Microsoft Corp (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/msft#NASDAQ">MSFT</a>) and Tesla Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tsla#NASDAQ">TSLA</a>).
In the early trade, money flows are negative in Amazon.com, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/amzn#NASDAQ">AMZN</a>), Alphabet Inc Class C (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/goog#NASDAQ">GOOG</a>), and Meta Platforms Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/meta#NASDAQ">META</a>).
In the early trade, money flows are negative in S&amp;P 500 ETF (SPY) and positive in Invesco QQQ Trust Series 1 (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/qqq#NASDAQ">QQQ</a>).
<h4>Momo Crowd And Smart Money In Stocks</h4>
The momo crowd is buying stocks in the early trade.&nbsp;Smart money is inactive in the early trade.
Note for new investors: Smart money often sells into the strength generated by momo crowd buying and buys into the weakness generated by momo crowd selling.&nbsp;Over a long period of time, investors come out ahead by adopting smart money&rsquo;s ways.&nbsp; The exception is in a raging bull market &ndash; for very short term trades, consider following the momo crowd and not smart money.
<h3>Gold</h3>
The momo crowd is selling gold in the early trade.&nbsp;Smart money is inactive in the early trade.
For longer-term, please see gold and silver ratings.
The most popular ETF for gold is SPDR Gold Trust (ARCA:GLD). The most popular ETF for silver is iShares Silver Trust (ARCA:SLV).&nbsp;
<h3>Oil</h3>
The momo crowd is buying oil in the early trade.&nbsp;Smart money is inactive in the early trade.
For longer-term, please see oil ratings.
The most popular ETF for oil is United States Oil ETF (ARCA:USO).
<h3>Bitcoin</h3>
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is seeing slight selling in the early trade.
<h3>Protection Band And What To Do Now</h3>
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges.&nbsp;The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.&nbsp;If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.&nbsp;A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.&nbsp; When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.&nbsp; High beta stocks are the ones that move more than the market.
<h3>Traditional 60/40 Portfolio</h3>
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of seven year duration or less.&nbsp;Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever <a href="https://thearorareport.com/generate-wealth-newsletter-benzinga">Generate Wealth Newsletter</a>.
This article is from an unpaid external contributor. It does not represent Benzinga&#39;s reporting and has not been edited for content or accuracy.

Eurozone

General

$BTC

GOOG

TSLA

Nvidia Driving Stock Market Rally, Average Stock Is A Different Story, AI Copper Trade Hurting

Paramount Global&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PARA#NASDAQ">PARA</a>) <a target="_blank" href="https://www.benzinga.com/m-a/24/06/39135330/why-is-paramount-global-stock-trading-higher-on-monday" rel="noreferrer noopener">controlling company</a>, National Amusements, has attracted interest from former media executive Edgar Bronfman Jr., backed by Bain Capital. The company is offering between $2 billion and $2.5 billion.
This interest comes as Shari Redstone, who controls Paramount, is negotiating to sell a majority stake in National Amusements to Skydance Media, potentially merging Paramount with Skydance.
Hollywood producer Steven Paul is also preparing a $3 billion offer for National Amusements, the Wall Street Journal <a target="_blank" href="https://www.wsj.com/business/media/edgar-bronfman-eyes-2-billion-plus-bid-for-company-that-controls-paramount-ccad92be?mod=latest_headlines" rel="noreferrer noopener">reports</a>. Paramount stock is trading lower on Monday.
The sale of NAI would result in a new controlling shareholder for Paramount. At the same time, the Skydance deal would offer non-Redstone shareholders a premium buyout option and provide $1.5 billion to reduce Paramount&#8217;s debt.
Shari Redstone received the fewest votes among directors in the company&#8217;s recent board election, with 32.2 million votes.
She also received the most votes against her election, totaling over 905,000.
During the annual shareholder meeting, Paramount&#8217;s co-CEOs presented a restructuring plan aimed at $500 million in annualized cost cuts, potential asset sales, and exploring partnerships for the Paramount+ streaming service, Reuters reports.
The company faces challenges with declining traditional TV business and has yet to recover lost revenue through its streaming service.
In May, Warren Buffett&#8217;s Berkshire Hathaway Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BRK#NYSE">BRK</a>) (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BRK#NYSE">BRK</a>) <a target="_blank" href="https://www.benzinga.com/m-a/24/06/39135330/why-is-paramount-global-stock-trading-higher-on-monday" rel="noreferrer noopener">sold its entire</a> stake in Paramount.
Earlier reports suggested Sony Group Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SONY#NYSE">SONY</a>) and Apollo Global Management Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/APO#NYSE">APO</a>) were jointly bidding for Paramount.
Paramount&nbsp;stock lost over 27% in the last 12 months. Investors can gain exposure to the stock via The Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>) and Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>).
Price Action: PARA shares were trading lower by 1.08% at $11.88 at the last check on Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by 4kclips via Shutterstock

Asset Sales

PARA

Sony Group Corporation American Depositary Shares

SONY

Paramount's Parent Attracts Bids from Bronfman Jr and Steven Paul

Bank of America Chief Investment Strategist Michael Hartnett has turned bullish on bonds for the second half of the year, while raising heightened risks of a stock market sell-off as investors bet on the first <a href="https://www.benzinga.com/topic/interest-rates">Fed interest rate cut</a>.
Hartnett, known for his bold contrarian market views, reiterated in his latest &#8220;The Flow Show&#8221; report that the &#8220;anything-but-bond&#8221; trade will play out for the remainder of the year.
According to Hartnett, a slowing economy will reduce the currently elevated equity valuations. Additionally, with fiscal policy expected to become more conservative in 2025, current market fears regarding bond yields are likely to ease. 
He advised investors to &#8220;buy any dip in bond prices,&#8221; while recommending to &#8220;sell the first cut&#8221; for stocks. 
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/05/38894659/bank-of-americas-contrarian-guru-unveils-best-portfolio-hedge-against-hard-landing-">Earlier this month, Hartnett suggested</a> the 30-year US Treasury provided &#8220;the best hedge for weaker nominal growth.&#8221;
<h1 class="wp-block-heading">The Worst Equity Market Breadth Since 2009</h1>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="658" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/31113823/image-125-1024x658.png" alt="" class="wp-image-365773" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/31113823/image-125-1024x658.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/31113823/image-125-300x193.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/31113823/image-125-768x494.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/31113823/image-125-1536x987.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/05/31113823/image-125.png 1568w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Chart: Bank of America Securities
Despite many investors and analysts on Wall Street believing that a Fed rate cut would further sustain the stock market rally, Hartnett&#8217;s counterintuitive call is based on a detailed analysis of the so-called &#8220;market breadth.&#8221;
Hartnett highlighted that the Equal Weight S&amp;P 500 Index, tracked by the Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>), is trading at its lowest relative to the cap-weighted S&amp;P 500 Index, tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), since March 2009.
According to Hartnett, &#8220;the worst stock breadth since March &#8217;09&#8221; is a warning sign, reflecting the extreme market dominance of a few tech giants, namely Magnificent Seven.
&#8220;AI crowds out Wall St &amp; Main St dollars,&#8221; Hartnett wrote in the note. 
He reminded investors that since 2020, there has been &#8220;pain trade after another&#8221; and predicted that the next trend will be &#8220;value outperforming growth&#8221; stocks, with &#8220;breadth winning&#8221; as economic growth slows.
<h1 class="wp-block-heading">A Benign PCE Failed To Support &#8220;Wobbly Tech&#8221;</h1>
The catalyst for this shift would be a benign April Personal Consumption Expenditure (PCE) report, which turned out to be unable to &#8220;support wobbly tech,&#8221; according to Harnett.
This appears to be the case, as on Friday, May 31, the Fed&#8217;s favorite inflation gauge came in as expected, alleviating fears of a reawakening in price pressures. 
Despite this, the Nasdaq 100 index, tracked by the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), tumbled 1.4% during midday trading in New York. As a result, tech stocks are set to snap a five-week winning streak.
You were right, Michael. 
Read now: <a href="https://www.benzinga.com/markets/equities/24/05/39113676/are-rate-cuts-imminent-after-feds-preferred-inflation-data-holds-steady-be-careful-what-you-wish">Are Rate Cuts Imminent After Fed&#8217;s Preferred Inflation Data Holds Steady? &#8216;Be-Careful-What-You-Wish-For Moment&#8217;</a>
Photo: Funtap on Shutterstock

Macro Economic Events

Macro Notification

Market Summary

Bank Of America Strategist Shifts To Bonds: Stock Sell-Off Prophecy On Benign Inflation Comes True

There are tons of interesting <a href="https://www.benzinga.com/topic/taxes">tidbits about Tax Day</a>. 
According <a href="https://www.irs.gov/newsroom/irs-delivers-strong-2024-tax-filing-season-expands-services-for-millions-of-people-on-phones-in-person-and-online-with-expanded-funding">to</a> the Internal Revenue Service (IRS):
<ul>
<li>Officers answered more than one million taxpayer phone calls this season.</li>
<li>They processed over 100 million individual tax returns through April 6.</li>
<li>Tens of millions more filings will be made on the April 15 deadline.</li>
<li>About 19 million taxpayers will file extensions due Oct. 15.</li>
<li>More than $200 billion in refunds were already delivered. </li>
<li>The average refund was $3,011 — a 4.6% increase from last April's average of $2,878.</li>
</ul>
These numbers change yearly, but there&#8217;s at least one fairly consistent Tax-Day trend: a jittery stock market. 
According to <a href="https://www.bankrate.com/investing/the-tax-season-effect/">Bankrate</a>, citing data from S&amp;P Global&#8217;s Kensho unit, the first couple weeks of April are typically &#8220;rougher.&#8221;
Many taxpayers will liquidate stocks or tap their money market funds to fulfill immediate cash requirements.
And from 2000 to 2016, the S&amp;P 500 Index declined an average 0.2% during the first two weeks before Tax Day.
After Tax Day, it&#8217;s a different scenario. The S&amp;P 500 usually bounces back to finish April about 1.7% higher on average (climbing &#8220;an astonishing&#8221; 75% of the time, Bankrate notes). 
Per <a href="https://money.com/stocks-could-rise-after-tax-day/">Money.com</a>, the S&amp;P 500 index enjoyed an average gain of 0.83% in the week following the tax deadline from 1998 to 2022 (for 19 out of 25 years). The one-week median gain throughout the year is 0.31%.
In April, the market&#8217;s overall impact is minimal. Investors would be wise to stick to their long-term investment strategy and prioritize contributing to tax-advantaged retirement accounts (i.e., <a href="https://www.benzinga.com/money/what-is-a-401k">401k plans</a> and <a href="https://www.benzinga.com/money/best-ira-accounts">IRAs</a>).
Historically, the S&amp;P 500 has yielded around 10 percent annual gains. The goal is to stay invested over time rather than attempting to time the market. 
Financial advisors typically suggest that their clients invest in S&amp;P 500 index funds (see below) and remain focused on distant future outcomes rather than short-term fluctuations.
<ul>
<li><a href="https://www.benzinga.com/trading-ideas/long-ideas/23/04/31731464/post-easter-spy-market-action-analyzing-s-p-500-etfs-historical-performance-after-the-ho">SPDR S&amp;P 500 ETF</a> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)</li>
<li>iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>)</li>
<li>Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>)</li>
<li>iShares S&amp;P 500 Growth ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVW#NYSE">IVW</a>)</li>
<li>Invesco S&amp;P 500 Equal Weight ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RSP#NYSE">RSP</a>)</li>
</ul>
Yardeni Research president Ed Yardeni predicts the S&amp;P 500 could surge <a href="https://www.benzinga.com/markets/equities/24/03/37724263/this-is-a-long-term-bull-market-market-expert-ed-yardeni-stands-by-his-5-400-year-end-s-p-500-ta">26% by 2026 to 6,500</a>.
"I think this is a long-term bull market,&#8221; the economist <a href="https://www.cnbc.com/video/2024/03/13/this-is-a-long-term-bull-market-says-ed-yardeni.html" target="_blank" rel="noreferrer noopener">told</a> CNBC in March. &#8220;I still got 5,400 by year-end and that was a pretty bold call a year ago, but right now that's looking pretty conservative, and why not more?"  
Now Read: <a href="https://www.benzinga.com/economics/macro-economic-events/24/04/38247125/retail-sales-rises-more-than-expected-in-march-indicate-strong-consumer-spending">Retail Sales Rises More Than Expected In March, Indicate Strong Consumer Spending</a>
Image: Shutterstock

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