Deutsche Bank-Thematic Research A Macro Guide to the Magnificent Seven-106496815

DeutscheBankResearchAMacroGuidetotheMagnificentSeven#PositiveImpactFebruary2024Distributedon:13/02/202405:38:06GMTJimReid(+44)-20-754-72943jim.reid@db.comGalinaPozdnyakova(+44)-20-754-74994galina.pozdnyakova@db.comLukeTemplemanImagebyDALL-E(+44)-20-754-10130luke.templeman@db.comDeutscheIMBaPnOkRTANTRESEARCHDISCLOSURESANDANALYSTCERTIFICATIONSLOCATEDINAPPENDIX1.MCI(P)041/10/2023.UNTIL19thMARCH2021ResearchINCOMPLETEDISCLOSUREINFORMATIONMAYHAVEBJiEmERNeiDdIS(P+4L4A)Y2E0D75,4P7L2E9A4S3EjSimE.EreiAd@PPdEb.NcoDmIX1FORFURTHERDETAILS.07T2se3r0Ot6kwoPaTheMagnificentSevenhavedominatedstockmarketsoverthelastfewyears.However,evenwellbeforetheywentexponential,backin2015,Apple,AlphabetandMicrosoftwerealreadythe1st,3rdand4thlargestmembersoftheS&P500..TotalreturnsinUSDsinceMarch2015,indexedto1002,0001,800BBGMagnificent7index1,600S&P5001,400Nasdaq100Stoxx6001,2001,0008006004002000201620172018201920202021202220232015Source:BloombergFinanceLP,DeutscheBank.DeutscheBankResearchJimReid(+44)2075472943jim.reid@db.com1AsaresultoftheMag7’sdominance,theUSstockmarketisclosetobeingthemostconcentratedinhistory...SotheperformanceoftheMag7isincreasinglycrucialtomacroasaresult...Inthepastmeanreversionhasoccurred.Butisthistimedifferent?Top10%ofstocksbysizeversustheentireUSstockmarket80%Marketcapconcentrationamongtop10%largestUSstocks75%Median...