Citadel Rubner: The “AI Bubble” bubble may have burst… Yardeni calling MAG 7 run over, they will underperform the rest of $SPX

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ETF activity has normalized after November’s spike. On November 20th, ETFs accounted for 41% of total equity volume (a 98th-percentile reading) but volumes have since reverted to the 28% 1-year average.

This suggests less aggressive hedging, a reduction in systematic short-gamma pressure from leveraged ETF flows, and a shift back toward single-name participation.

https://www.citadelsecurities.com/news-and-insights/december-year-end/

(Bloomberg) — Yardeni Research now recommends effectively going underweight the Magnificent Seven megacap technology stocks versus the rest of the S&P 500, expecting a shift in earnings growth ahead.

“We see more competitors coming for the juicy profit margins of the Magnificent 7,” and expect that the productivity and profit margins of the rest of the S&P 500 will be boosted by tech, said Wall Street research veteran Ed Yardeni. He added that in effect, “every company is evolving into a technology company.”

The strategist said that it no longer makes sense to continue recommending overweighting the Information Technology and Communication Services sectors in an S&P 500 portfolio, after having kept that weighting since 2010, according to the research note Sunday. The firm recommends market-weighting of the two sectors by adding to overweights in financials and industrials, and overweighting health care.

https://finance.yahoo.com/news/research-veteran-yardeni-ends-15-063124432.html