What Can Break This Rally In Concentration Risk?
From Macro EDGE Roundup recorded on 07/09/2024
In this short clip from Macro EDGE Roundup recorded on 07/09/2024 (available to EDGE members), Craig Shapiro and I discuss the current state of the equity market, particularly highlighting the significant concentration risk within mega cap tech companies, which we describe as a "safety trade."
We express concerns about the sustainability of this trend, noting that the passive capital flows into the market are likely to continue unless there is a significant economic disruption like payroll declines. We also explore the potential impact of changes in corporate buybacks and systematic funds on market dynamics.
Our conversation touches on the broader implications of market concentration, questioning the potential for regulatory or structural changes to the composition of major indices like the S&P 500.
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