Magnificent 7 NOT so magnificent afterall ?
$623 Billion Loss.
Declines in Tesla, Nvidia and other large tech stocks could mean a $623 billion market-cap wipeout for the 'Magnificent Seven' - the biggest one-day total on record
Thursday's selloff in large technology companies could result in the biggest one-day market-capitalization erasure for the "Magnificent Seven" on record.
Nasdaq Heatmap for Thu, 11 July 2024
All seven technology stocks were off at least -2.5% in Thursday afternoon trading. (see above)
According to Dow Jones Market data, the activity would translate to a $623 billion single-day collective loss of market cap for that grouping - the largest on record dating back to Meta Platforms Inc.'s (META) 2012 initial public offering.
Biggest Loser.
Based on Dow Jones Market data, $Tesla Motors(TSLA)$ was the biggest loser (daily) of the bunch, off -8.2% and on track to snap its 11-session winning streak in a big way, with its largest one-day decline since a -12.1% fall on 25 Jan 2024.
While Tesla shares were up earlier in the session, they pulled back sharply following a Bloomberg News report saying that the company plans to delay its robotaxi event to October from August.
MarketWatch has sought comment from Tesla, which has disbanded its media-relations team.
Next 2 Biggest Losers.
Shares of $NVIDIA Corp(NVDA)$ and $Meta Platforms, Inc.(META)$ - the two biggest YTD winners in the group - were the next most sizable daily losers, each off more than -4.5%.
On Thu, 11 Jul 2024, the weakness in large Tech shares comes about as the latest US consumer inflation data showed signs of cooling, fueling hopes for a September interest rate cut by US central bank.
Rate-cut expectations, in turn, have investors selling tech winners as they give a fresh look to shares of companies like homebuilders, pool suppliers and others that stand to benefit from lower rates.
According to Jones Trading, CMT Chief Market strategist — Mike O’Rouke:
The Magnificent Seven names have exhibited high levels of insensitivity to interest rates.
They won't be the beneficiaries of new easing,
My viewpoints: (mine only)
Magnificant Seven - YTD performances
Statistically, 6 of 7 Magnificent Seven stocks have fared well YTD: (see above)
Nvidia, +164.48%
Meta Platform, +48.06%
Google, +34.21%
Amazon, +30.09%
Microsoft, +22.60%
Apple Inc, +22.59%
Tesla, -2.97% [1 Month:+35.95% ] - exceptions.
Due to real estate, only selective summary of Mag 7 stocks prior to Friday’s trading will be shared.
(1) Nvidia.
No guessing required which Magnificent Seven stock is still the best performer (Nvidia) in 2024, so far.
Even with Thursday -5.57% fall, it still retains its pole position in terms of returns.
Afterall, Nvidia had a bumper harvest in 2023 already, rising a whooping +233.24% for the year. (see above)
It is poised to open on Friday at -0.10% lower than Thursday. Its pullback is not for the faint hearted.
(2) Meta Platform.
Mark Zuckerberg’s Meta 2nd position has a similar story line to Nvidia’s.
Its 2023 YTD performance was a stellar +172.24%., continuing into 2024 with another +48% (H1 2024) gain so far.
Meta’s agility to successfully navigate and pivot away from the colder than cold Metaverse and into Artificial Intelligence (AI) and Augment Reality (AR) was its saving grace.
Ringing a similar tune, Meta will open Friday -0.29% lower than its Thursday closing.
(3) Google.
Interestingly, Google shared the same trajectory as Nvidia and Meta Platform for its Year 2023 and 2024 performance.
Didn’t realize this until my homework for this post.
From its peak of $149.65 achieved on 12 Nov 2021 - Google began to trade down until 30 Dec 2022 when it bottomed at $88.73 per share.
Lest we forget, Google had undergone a forward 20-for-1 stock split on 18 Jul 2022.
This tech giant had its “first” major challenge when OpenAI unveiled ChatGPT to the world on 20 Nov 2022.
It encountered a disasterous reception when it hastily unveiled “Bard” in February 2023 in an attempt to challenge ChatGPT.
Its ability to dig deep in times of crisis, helped it to recover lost grounds as Bard morphed into “Gemini” that was able to mount a relatively successful challenge against ChatGPT.
Google’s public AI journey has just started and has many more milestones to achieve.
Google is forecasted to open Friday’s trading at +0.091% higher than its Thursday -2.78% decline.
What’s Next for Fri, 12 Jul 2024 ?
JP Morgan, Wells Fargo and Citibank will be reporting their Q2 2024 earnings in the morning.
As shared in my 09 Jul 2024 post, $JPMorgan Chase(JPM)$ is expected to report a weaker-than-expected earnings. (click here ! to read, give a Like ok)
Should this falls true, the #1 US bank with its clout, would pressure US market to fall further.
As for Citibank, it will need to report a more than stellar set of Q2 earnings, after another $136 million fine by US regulators on its inability to close up all regulatory gaps identified back in 2020. (see above)
The bank had already been fined $400 million back in 2020 after identifying "ongoing deficiencies" were identified; in the bank’s (a) risk management, (b) internal controls and (c) data quality management.
Will today presents a “unique” buying opportunity for investors if, Magnificent Seven and Banks stocks continue to consolidate for a second day ?
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