Equities (^DJI, ^IXIC, ^GSPC) are trending higher ahead of major technology earnings reports despite continued market rotation. Thomas Hayes, Chairman and Managing Member of Great Hill Capital, shares his outlook for the market on Catalysts.
Hayes explains that there is a “fundamental basis” for his belief that the remaining 493 companies in the S&P 500 will begin to outperform the Magnificent 7. He cites revenue mix as the main driver, highlighting the changing dynamics of revenue growth. In the fourth quarter, Hayes projects 19% growth for the 493 compared to 17% for the Magnificent 7, pointing out that “revenue growth for the Magnificent 7 will decelerate and revenue growth for the non-Magnificent 7 493 will accelerate.”
As the market hopes for interest rate cuts from the Federal Reserve, Hayes points to four areas that are doing well: small caps, cyclicals, international stocks and real estate investment trusts. He advises investors that “when everyone is on one side of the boat, it’s wise to slowly start looking at other opportunities in the market.”
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This post was written by Angel Smith