I'm always one for a data point.
I'm thinking specifically about the Max seven, and we have this index or gauge
of the mag seven at one point in the session.
It's biggest drop on record. Take everything that our team have just
just said and apply it to what's happening with the biggest technology
names. Sort of colloquially volatility didn't
take the summer off. And we saw the markets were led by the
Magnificent Seven and on the way lower. It's been the Magnificent Seven that
have been really the weak spot. I think the issue has been that of
expectations. These companies continue to deliver
outsized earnings growth at the bar was very high heading into this quarter.
And as a result, we did see some some disappointments.
These were the names that have been trading the highest PE ratios.
So as we're talking about the yen carry trade hedge funds, many hedge funds
borrowing and again, to invest in other

assets.
And now with the yen overseas, and they're selling some of those assets, and
no doubt some of these are the magnificent seven stocks.
So we have a combination of high bar. We have earnings broadening to other
sectors. For example, this earnings season, we
have seen the biggest earnings surprises coming from defensive sectors, and also
some of the cyclical ones, and not the growth sectors that we have been used to
over the last couple of earnings seasons, but at the same time, the
fundamentals have not changed. Exactly.
So let me jump in. The fundamentals have not changed is
what you just said. We made a big deal of the gain in
the S&P 500 in the first half of this year, 14% or so, largely coming from the
Magnificent Seven. And in years where the S&P 500 has gained
double digits in one h, it usually goes on to perform in two.
H How much of a departure is this

session from that historic trend?
No doubt, this is an abrupt and uncomfortable pullback.
And I think there's two things going on. One is the technical picture, which, if
it is an overreaction, the potential move lower presents an opportunity for
the remainder of the year. And then the second part we need to
answer as investors is, is there something fundamentally broken?
Meaning, are we heading towards a recession?
Because part of a lot of that narrative has been around the growth scare.
And I think for our clients' perspective, we need to first answer the latter.
The U.S. economy still continues to grow, let's
call it trend or maybe slightly below trend.
Looking at the GDP now, estimate for Q3 is still slightly north of 2%.
We just got the ISM services PMI that was well into expansion territory and
the employment employment component very importantly and provided some some
reason for optimism given the Friday

jobs report that we get.
So we do not think that the U.S. economy in a week's time is going to
fall off. But we have seen still rising earnings,
corporate profits, consumers, and corporate balance sheets remain healthy.
So I think it fits into the narrative broadening and market leadership away
necessarily from the overall and potentially overextended back.
So we are still positive for the remainder of the year, but we don't
think that the Magnificent Seven are going to be once again the ones that
everybody gravitates towards. Angelo, chief of what among what you've
just outlined is in video we are way off session lows.
Nvidia is down 6%, but one point in the session was down 15%, which for a
company that size is a big drop. There was a report from the information
that said Blackwell the next generation accelerator would face delays due to a
design issue over the weekend.

Nvidia got back to us and said that actually hopper demand is strong. BLACKWELL Sampling is started. They don't comment on rumors, etc. You just said that will move away from sort of the concentration of leadership. But we have to wait until the 28th of this month to get immediate earnings. That's quite a long period of time in which the markets could have some anxiety for what has been a leader in the direction of travel. What do you make of that? Yeah, the MVP is the last of the Magnificent Seven to report earnings and adore the stock and everybody the whole world is watching. And the theme so far with everybody's excited about it artificial intelligence. But there has been some skepticism over the last couple of weeks and investors are getting increasingly impatient to see the heavy spending of AI translate into return of profits. But what we have been hearing from the remainder, Magnificent six of the seven that they have been spending.

So that should continue to be a tailwind
for NVIDIA. And I think that what we are hoping with
here is again the high bar of expectations.
When you have a stock that's been up so much over the last couple of years and
so far this year, even with the recent pullback, naturally that creates tension
points. Whenever a news like we have been
getting over the last couple of weeks in markets.
But at the same time, again, we still continue to be positive around
artificial intelligence, not only for this year but for the next 5 to 10
years. And I think that that is important for
an investor to remember.

Big Tech Stocks Hit Hard in Latest Selloff

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