Let's bring in the great Phil Rosen, chief market strategist at Pro Cap Financial.
There's a lot going on here, my man.
First of all, thank you for being here as always.
Thank you for having me, JD.
We got can't miss big tech earnings coming up, but I want to get your take on market leadership.
Where we are for these names.
Without Nvidia, are the MG 7 now the slowest growers, or at least slower in the S&P All Things Considered.
So that's what I wrote in my newsletter this.
Morning and I highlighted how according to fact set consensus estimates, the MAG 7 are expected to grow earnings at about 23-24% this quarter, but if you take Nvidia out, that drops down to about 6.5%.
So that's actually below what the S&P 493 expects, about 10%.
So the story around the MG 7 being market leadership, top heavy, big tech.
That kind of goes away if you pull out Nvidia, and Nvidia, you know, they've made a living of crushing earnings every single quarter, and that's going to continue.
But the rest of the MAG 7 have really slowed down, and we're going to see that starting this quarter.
Tomorrow we've got Microsoft, Meta, Amazon, and Alphabet.
We'll get Apple on Thursday.
What do those big tech names, the most consolidated names in the S&P 500, what do they need to prove?
They're probably all going to do just fine.
They're going to report great results for the quarter, but the thing that the street is going to be watching is if they raise their capE expectations for the rest of the year.
If they come in, any one of these names and say, Hey, we're adding 5 $10.20 dollars, $30 billion of spend for the AI data center buildout, the street might react negatively to that because they've already piled on so many billions of dollars of spend expectations over the last couple of years.
And if they add to that.
More we could see a negative stock reaction, but again, long term, I think these companies will do just fine.
These are massive, massive giants.
They have huge balance sheets.
Even if they spend a bit more than expected, that doesn't break the long term bull pieces.
I want to get your take.
What are we seeing in terms of breadth and overall market structure?
It's one thing for the lieutenants, the generals at the top of the pack to do the heavy lifting.
You want to see some breadth and some smaller names and on the fun as well.
The S&P 4.
3 are actually looking really solid over the last few months, and we can see this in the equal weight S&P 500 index.
It's actually keeping right there with the market cap weight.
I think they're both up about 4.5% for the year.
And when those are matched or equal in performance, that's when you know the 493 are really pulling their weight and it's not just a mag 7 story as it's been the last couple of years.
So I think this is a great sign for the secular bull market to continue.
If you want that.
You want that rotation, and we're right there.
Since this is probably the last time you and I will speak before the tranche of earnings, before Fed Day, before PCE, any other big catalysts you're paying close attention to over at Proca you think the rest of us might also benefit from focusing on a little bit.
You know, the big thing we didn't touch on is the Fed.
Jerome Powell is going to have his legacy defining press conference on Wednesday, and that's probably going to be his last time as Fed chair giving a presser.
But the thing to watch is whether it's his.
Last time in the Fed moving forward because he might stick on for another couple of years as a governor.
We don't exactly know.
There's some political ramifications there.
There's questions of Fed independence, but otherwise that's what I'm watching right now.
Wow, the final day with Jerome Powell.
It doesn't even feel real, but we will have that press conference tomorrow at 2:30, a half hour after the FOMC decision on short-term interest rates at 2 o'clock.
I don't think we have you on the show, but I'm sure we'll be texting the latest.
The great Phil Rose, my man.
Thank you for being here.
