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The Nasdaq Composite (^IXIC) is facing downward pressure Wednesday morning following earnings data out from two Magnificent Seven members: EV maker Tesla (TSLA) and Google parent company Alphabet (GOOGL, GOOG).
The Morning Wealth welcomes Commonwealth Financial Network CIO Brad McMillan to talk about his outlook on the upcoming results from the remaining Magnificent Seven stocks and whether Tesla and Alphabet's results are weighing on investor confidence.
McMillan points to "a threat of more pressure" ahead for the Magnificent Seven. He cites high valuations based on earnings growth as a key concern. "If you don't see that earnings growth, and clearly we didn't see that with either of those two companies, that means that valuation has to come into question," McMillan tells Yahoo Finance.
He notes that with the gap between the Magnificent Seven and the rest of the S&P 500 — commonly referred to as the 493 — being "extremely large," these tech giants are tasked with performing "incredibly well."
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Regarding concerns about a potential consumer pullback affecting earnings, McMillan remains optimistic. He emphasizes that the consumer is healthy, citing robust job market conditions and continued wage growth. "The actual purchasing power of the average worker continues to grow in a very, very healthy way," he states, indicating he is not worried about a decline in consumer spending.
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This post was written by Angel Smith