Why megacap tech dominance of market returns may soon end. Plus, the overbought TSX utility stock

The artificial intelligence hype has provided a second wind for some of the megacap technology stocks – Microsoft Corp., Nvidia Corp., Meta Platforms Inc., Alphabet and Amazon.com – that have been dominating market performance for most of the past four years. But if a new research report by Scotiabank strategist Hugo Ste-Marie is accurate, the dominance will soon come to an end.

The expansion phase is also characterized by broad market leadership. More stocks generate strong earnings growth and the best returns come from buying earnings growth at the lowest price – the definition of a value market. A broadening in profit growth to sectors beyond technology would see the latter underperform. Because the S&P 500 is a cap-weighted index where returns are weighted heavily towards the largest stocks, benchmark performance could be disappointing even as the economy accelerates and earnings growth improves. This may prove a rude surprise for passive investors.

France Dernières Nouvelles, France Actualités

Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.

The highest-yielding stocks on the TSX, plus risk dataA look at the equities dividend investors should be seeking
La source: globeandmail - 🏆 5. / 92 Lire la suite »

Canada's 'super strong' immigration boom could boost these TSX-listed stocksDollar store chains, airlines, and telecom giants are among the companies spelling out plans to capitalize on an influx of new arrivals.
La source: YahooFinanceCA - 🏆 47. / 63 Lire la suite »