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SPX Sector rebalance AAPL MSFT


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#1 K Wave

K Wave

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Posted 19 March 2023 - 01:15 PM

https://www.bloomber...watch#xj4y7vzkg

 

 

This could be real important going forward, as with such a massive weight in just 2 stocks, which also happen to be the 2 largest market cap stocks in the USA....

IF...things starts to turn south, selling could lead to even more selling....

 

The departures will shrink tech’s weight in the S&P 500, while also making the remaining companies in the industry index more influential. Apple and Microsoft together already account for 46% of the S&P 500 Information Technology Index, and that share will go up when Visa and Mastercard are removed: The credit-card companies are the fourth- and fifth-biggest components, respectively, of the tech benchmark, accounting for 6.8%.

 

The increased weighting of Apple and Microsoft means investors who are benchmarked against the tech index will have an incentive to own even more of those two stocks to keep up with the index, but that also would heighten the effect if the shares start underperforming the market.

 

 

Still, Apple and Microsoft stand alone in their influence. The two are the largest stocks in the overall market, representing 13.1% of the S&P 500. Over the past 10 years, the pair’s average combined weight was 8%. This means the rest of tech, regardless of individual corporate fundamentals, are likely to suffer if this strength reverses.

 

“If you have an environment where two companies that are a huge part of an index are performing differently than the rest, that’s a terribly difficult environment to operate in,” said Denny Fish, who manages tech sector funds at Janus Henderson.

 

And Famous last word here:

 

However, he stressed that the growing influence of tech wasn’t inherently a risk.

 

 


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#2 pdx5

pdx5

    I want return OF my money more than return ON my money

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Posted 19 March 2023 - 02:02 PM

How many new iPhones are needed? What is it now iPhone-13 or something?

Microsoft has built in income. Every time anyone buys a new PC with Windows, Microsoft gets a cut. 


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