by Robert Barone
Forbes
The financial markets were “mixed” this week (ended June 14) with the tech sectors moving smartly ahead while the more traditional sectors lagged. The S&P 500 (+1.6%) and the Nasdaq (+3.0%) both closed higher. But the industrial stocks were flat to down as represented by the Dow Jones Industrials which were off -0.8% for the week. Year to date, both the S&P 500 (+13.9%) and the tech heavy Nasdaq (+17.8%) are up double digits while the industrial based Dow Jones is only up +2.4% for the year and is down -3.1% so far this quarter.
The tech heavy Nasdaq is hot because of the Artificial Intelligence craze, and that shows up in the S&P 500 in the Magnificent 7. As noted by Rosenberg Research, on a quarter-to-date basis, Nvidia is up +46%, the Magnificent 7 are up +15%, but the S&P 500 in total has grown just over +3%, and if we look at the “other 493,” i.e., S&P 500 ex-Mag 7, we see a negative sign (-2%)! That comes through in the Dow Jones Industrial Average which are off more than -3% year-to-date, indicating issues in the manufacturing/industrial space, and likely presages Recession.