When the financial markets try to send investors a message, it is very rarely done straightforwardly. Instead of letting everyone know that the path forward is higher or lower, hidden messages start to show up everywhere else, to be decrypted by only those investors who know what they’re looking for and the reasons behind the factors.
Today’s market action has to focus on the so-called “Magnificent 7” stocks, which carry most of the weight in the S&P 500 in terms of positioning and sentiment. These stocks create a sense of importance and a new driver for investors to keep track of in the coming months and quarters. There is an opportunity to cover some portfolio risk and potentially save all the gains that have been made since the COVID-19 pandemic’s bull run.
