Bank of America strategist says yes

  • The S&P 500 could still reach its year-end target of 5,000 even if the Magnificent Seven stocks remain flat
  • Bank of America strategist dismisses concerns about the market’s reliance on megacap stocks
  • Broadening out of the market suggests that more stocks will catch up and contribute to the index’s climb
  • Only 24% of stocks in the S&P 500 are currently trading within 10% of their all-time highs
  • Investors should focus on broad diversification rather than solely investing in the Magnificent Seven

The S&P 500’s year-end target of 5,000 can still be reached even if the Magnificent Seven stocks, which have driven the market’s advance this year, remain flat, according to Bank of America strategist Savita Subramanian. She dismisses concerns about the market’s reliance on these megacap stocks and believes that the broadening out of the market will continue, with more stocks catching up and contributing to the index’s climb. Currently, only 24% of stocks in the S&P 500 are trading near their all-time highs, indicating room for further growth. Instead of solely investing in the Magnificent Seven, investors should focus on broad diversification to capture the returns of future top-performing companies.

Public Companies: Apple Inc. (AAPL), Microsoft Corp. (MSFT), Nvidia Corp. (NVDA), Alphabet Inc. (Class A) (GOOGL), Alphabet Inc. (Class C) (GOOG), Tesla Corp. (TSLA), Amazon.com Inc. (AMZN), Meta Platforms Inc. (META)
Private Companies:
Key People: Savita Subramanian (Head of Equity and Quantitative Strategy at BofA Global Research), Wes Crill (Senior Investment Director at Dimensional Fund Advisors)

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Factuality Level: 6
Justification: The article provides some analysis and opinions from experts, but it also includes relevant data and facts to support their claims. While there may be some bias towards the positive outlook for the market, overall the article presents a balanced view of the situation.

Noise Level: 3
Justification: The article contains some repetitive information and filler content, such as the mention of the text-to-speech technology and the request for feedback. It also includes some irrelevant information about the performance of the Magnificent Seven stocks in 2022. However, it does provide some analysis and insights into the market’s dependence on these stocks and the potential for the S&P 500 to reach its year-end target even if the Magnificent Seven remain flat.

Financial Relevance: Yes
Financial Markets Impacted: The article discusses the performance of the S&P 500 and the reliance on the Magnificent Seven (Apple, Microsoft, Nvidia, Alphabet, Tesla, Amazon, and Meta Platforms) in driving the market’s advance. It also mentions the broadening out of the market and the potential for other underperforming stocks to catch up.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article primarily focuses on the performance and outlook of the stock market, specifically the S&P 500 and the Magnificent Seven stocks. It does not mention any extreme events or their impact.

Reported publicly: www.marketwatch.com