The ” Magnificent Seven ” stocks rallied along with the broader market on Monday, raising hopes for a turnaround after a monthslong rout in the biggest technology names. All seven stocks in the Magnificent Seven rose in the session, with CNBC’s index of the group adding about 3.7%. Tesla led the way, soaring more than 11%, the most since November. Meta followed, climbing nearly 4%. That marks an about face after the megacap tech stocks underperformed in recent months. The Magnificent Seven lagged the broad market S & P 500 in 11 of the past 12 weeks, according to data analyzed by Raymond James. “I can think of no better simple measure to determining hedge fund de-leveraging and global equity flight from the U.S.,” Tavis McCourt, institutional equity strategist at Raymond James, wrote to clients in a Sunday note. “There has been no panic, just very consistent underperformance for essentially a quarter,” he added. “One gets the sense the global rotation out of U.S. equities has not stabilized until this trend reverses.” .MAG7 .SPX 3M mountain CNBC’s Magnificent 7 index vs. the S & P 500, 3 months In McCourt’s view, Monday’s Magnificent Seven performance can be a reason for optimism in the broader market. But Wall Street is divided on what to expect out of this closely followed group in coming months. Morgan Stanley strategist Michael Wilson said earnings revisions for Magnificent Seven companies appear to be bottoming. That can encourage investors to rotate back into U.S. stocks, he said, given that a key overhang has been underperformance by the high-tech leadership. On the other hand, Mislav Matejka, head of global and European equity strategy at JPMorgan, dissents. He said the Magnificent Seven’s recent “respite” from oversold territory will likely not last and that investors should look instead to defensive names. “Growth style, U.S. Tech & Mag-7 are unlikely to sustainably rebound this year, in our view, due to still elevated positioning, concentration risk and high expectations,” Matejka wrote to clients in a Monday note. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
