00:00Cam Dawson of New Edge Wealth writing, now we are seeing the biggest names turn around
00:03and rebound. Could this be the source of escape velocity for an index that has been flat for
00:08over two months? Cam joins us now for more. Cam, good morning. Good morning. Everything in tech
00:12started to rally. Hyperscalers, chips, software too. What's happening? Well, when you have 33%
00:17of the index, meaning the Mag7 up 8.5% in three days, that does a lot to boost the
00:23overall market
00:24because what we were seeing over the course of the last couple of months is weakness within
00:29hyperscalers or weakness within semiconductors, certainly in July, is being offset by strength
00:34in other places. The fact that you were still seeing 70% of names in the S&P 500 trade
00:39above
00:40their 200-day moving average with a flat index was telling you that there was this breadth underneath
00:44the surface. And the good news is a day like yesterday didn't come at the expense of the
00:49equal weight index. We didn't see big outflows coming out of equal weight into Mag7 or software,
00:55for example. What we're seeing was everything was rallying. And I think part of the reason we're
01:00seeing this is we did reset valuations in a lot of these areas. You've had Mag7 go from 35 times
01:06back
01:06in October of last year to 22 times. Lowest valuation since last year with Liberation Day,
01:12lowest valuation since going back to 2022. So it just gives room for this lift. And it's important
01:18to remember the average valuation over the last five years for Mag7 has been about 28 times. So
01:23there's still room for this valuation just to normalize.
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