The Mag 7 [AAPL, MSFT, GOOGL, AMZN, NVDA, META, TSLA] rally has been earnings-driven rather than relying on multiple expansion. Of the group’s 28% return since 2019, 21% is attributable to sales growth, 6% from margin expansion, and just 1% from multiple expansion. This is quite different than the margin-less bubble in 2000-2001. But there are challenges as well, market concentration has reached its highest level since 1972. The top 10 stocks have broken away from stocks #11-#50 to an even greater degree than during the tech bubble in 2000-2001. Large spikes in market concentration have frequently coincided with or preceded prior recessions. Antitrust issues are the primary Achilles heel I can imagine that could disrupt the continued domination of the largest stocks. While Tesla has run into a pricing buzzsaw and lower volumes, the rest continue to thrive.
- Date Posted:
- February 8, 2024
Scientists said the global sea surface temperature reached a record high of almost 20.97C for January. It was the second-hottest sea surface temperature recorded for any month ever, with only August 2023 surpassing it at 20.98C. The El Niño phenomenon, which heats the Pacific Ocean surface and exacerbates global warming caused by greenhouse gas emissions, has contributed to sea temperature rises in recent months. But they warned that sea surface temperatures had already reached “new absolute records”, with a level of 21.12C recorded on February 4 surpassing the previous high reached last August. Last May the World Meteorological Organization said there was a 66 percent chance that the mean global temperature would temporarily surpass 1.5C above pre-industrial levels in “at least” one year by 2027.