weekly market update 7/19/2024

The S&P 500 fell over -1.5% on the week for the first time since April, but last week’s rotation out of the Magnificent 7 and mega cap stocks continued, as the 10 largest stocks in the S&P 500 fell on average about -4.7% this week, while the remaining 490 stocks within the index saw on average a 0% return.  Wednesday was a particularly unusual day as for the first time since April 2000, the S&P 500 fell over 1%, but saw more stocks finish the day higher than lower (254 advancing stocks).  Such market broadening was not specific to the S&P 500 either as the small-cap Russell 2000, rose over 1.7% this week and is up almost 7% for the month.  Next week over 25% of companies in the S&P 500 will report earnings and Friday’s personal consumption expenditures (PCE) report will be particularly important as markets continue to watch inflation and price-in interest rate cut expectations.

MAGNIFICENT POWER CONSUMPTION

It is increasingly well known that AI and the datacenters required to power this emerging technology consume enormous amounts of electricity, but recent data from Datawrapper frames it in a rather remarkable way.  Per data from the US Energy Information Administration (EIA), last year Google and Microsoft with their massive data center networks consumed more electricity than many countries (see chart below)!

Ian G. Browning, CFA
Managing Director, Investment Strategies | Shareholder

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