ACTV - SPX 500: Further Weakness May Trigger A Medium-Term Global Risk-Off Event

2024-07-26 04:30:00 ET

Summary

• Market participants have started to question the earlier high earnings growth prospects placed on the “Magnificent 7” stocks.
• The past month of record-low implied correlation among S&P 500 component stocks can increase the odds of a more pronounced spike in the VIX.
• The S&P 500 is at risk of shaping a medium-term (multi-week) corrective decline phase which may trigger a global risk-off scenario.

Originally published on July 25, 2024

By Kelvin Wong

The mega-capitalization stocks have led Wednesday’s rout in the US stock market ( SPX , SP500 ) where the Magnificent 7 cohort (Apple ( AAPL ), Amazon ( AMZN ), Microsoft ( MSFT ), Nvidia ( NVDA ), Tesla ( TSLA ), Alphabet ( GOOG , GOOGL ), and Meta ( META )) shed close to -US$760 billion loss in their combined market capitalization in a single day on Wednesday, July 24, 2024....

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