The Magnificent 7 and the myth of mean reversion<\/p>\n
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With valuations sky high and 2025\u2019s many economic headwinds now being met with little more than a shrug by equity markets, Lazard\u2019s chief market strategist Ron Temple thinks we\u2019re in a period of \u201cextreme optimism\u201d where all news is good news. In this wide-ranging interview, Temple explains the important factors he thinks that investors may be overlooking right now (Fed independence and tariff lags), which of China, Japan and Europe are worth keeping an eye (and which aren\u2019t) and why we could be at the beginning of the end of American exceptionalism.<\/p>\n
READ MORE<\/a><\/p>\n FNArena reporting season monitor: August 2025 – Week 4 (338 stocks covered)<\/p>\n Welcome to the fourth weekly report for the August 2025 results season. The FNArena Reporting Season Monitor reports ratings, consensus price target changes, and brief summaries of the collective responses from FNArena’s database of brokers for each of the stocks covered. The latest update is now available for download, with coverage of the 338 stocks that have reported results in August. You can access the full PDF in the attachment at the bottom of this wire. Readers should be aware that it doesn’t matter what profit or loss has resulted from a company. What’s important is how the stock fared against consensus forecasts \u2013 whether management delivered a “miss” or a “beat”.<\/p>\n DISCOVER NOW<\/a><\/p>\n Top 3 Wires this Week<\/p>\n Here are the weeks top viewed or liked wires by our subscribers:<\/p>\n Some of the best wires from our Contributors this week:<\/p>\n Commodities<\/p>\n Water: The ultimate scarcity play<\/p>\n <\/a>Chart of the Week: Non-tech stocks are waking up – and that\u2019s good news<\/p>\n Source: The Compound Media, data via Bloomberg Finance<\/p>\n For much of this rally, investors have worried about the market\u2019s reliance on the \u201cMagnificent 7\u201d – Apple, Microsoft, Alphabet, Amazon, Meta, Tesla, and Nvidia – to keep powering returns. But consensus earnings estimates show the other 493 companies in the S&P 500 are finally catching up. Growth for the S&P 493 is projected to exceed 10% next year, with some quarters (like Q4 2026) forecast to match the Magnificent 7, at 14%.<\/p>\n \u201cYou want every sector to be contributing to profits. I see two trends here: earnings growth leveling off for the most highly valued sector, especially as its biggest participants spend a huge chunk of cash on AI (without much proof of profits),\u201d said Callie Cox, Chief Market Strategist at Ritholtz Wealth Management.<\/p>\n For diversified investors, it\u2019s a much-needed sigh of relief: the rally may finally be broadening, underscoring the importance of keeping value stocks in the mix.<\/p>\n Vishal Teckchandani<\/a>, Senior Editor, Livewire Markets<\/p>\n Weekly Poll<\/p>\n As the ASX surged past 9,000 during reporting season, the ASX 200\u2019s P\/E ratio climbed above 20x, a level rarely reached outside of unusual market conditions.<\/p>\n Do the results justify these valuations?<\/p>\n a) Yes – earnings growth supports them, I\u2019m still buying\n<\/p>\n b) Somewhat – valuations are high, I\u2019m holding but cautious\n<\/p>\n c) No – they look stretched, I\u2019m not adding at these levels\n<\/p>\n d) No – a correction is coming, I\u2019m actively selling\n<\/p>\n VOTE NOW<\/a><\/p>\n LAST WEEKS POLL RESULTS<\/p>\n We asked “How has the (reporting) season been treating you so far?”<\/p>\n The poll shows 54% said some good, some bad, 24% said they were sailing through without a worry in the world (so far), 20% said they had copped a couple of big whacks but were not worried as long-term investors, and 2% said their portfolio was on life support.<\/p>\n SEE RESULTS BREAKDOWN<\/a><\/p>\n Get the Weekend Edition straight to your inbox<\/p>\n Popular and exclusive content from the week sent every Saturday morning<\/p>\n SUBSCRIBE TO TRENDING ON LIVEWIRE – IT’S FREE<\/a><\/p>\n Other Newsletters across our network<\/p>\n Trending on Livewire Daily<\/a>: Get the best of Livewire by signing up to our popular daily newsletter<\/p>\n Market Wraps<\/a>: Concise market recaps of the ASX’s most critical events 2x daily<\/p>\n<\/p>\n
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