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Well, we are going to move on here and look at the magnificent seven ETF. The shares are down over the last five days, with the mag7 shedding over 140 billion dollars in market cap on Monday that dragged the S&P 500 over .3% lower to the downside. Now, this is ahead of Nvidia's highly anticipated earnings report out Wednesday after the market close. Here to discuss what's next for the sector. We've got Sima Shaw, principal asset management, chief global strategist. Sima, it's always great to have you on. So thank you for making the time here. I just want to talk about what we are seeing in terms of this market rotation at the moment. Earlier, I was mentioning that the Russell was sort of the outperformer yesterday. Now, today the Russell taking a bit of uh the foot off the gas here. Is this rotation that we're seeing right now a healthy one, or is that just the label that folks who come on our show are putting on it to make sure that we maintain some upside momentum here?

Thanks for having me on. So I think what you have been seeing is in the latest earnings season, that really strong um earnings performance that we had seen very much isolated to that big tech group has now started to broaden out to other sectors. That is a reflection of pretty healthy, solid economic growth. So it is it is, I think it's a healthy um improvement in the markets. You never really want it to be entirely dependent on a handful of of companies, which can always potentially disappoint. So this is good news. The thing that we need to watch from here though is with the economy slowing down somewhat, can you continue to expect to see some of these other sectors which have done well in Q2 to actually continue to deliver good performance through the rest of the year into 2025? And I think the jury is probably still out on that one.

What are those sectors?

So, anything outside of the the big tech, the the large consumer discretionaries. So some of the areas that we'll be watching out for at this point is of course financials, um some of the companies which do well in a rate cutting environment such as real estate utilities. So there's different segments which will be buffeted by the various forces. What we generally want to see though for a healthy equity market is that you're seeing performance which is spread out across a number of sectors rather than just being driven, um as I said, by the magnificent seven or a couple more tech companies.

Sticking with tech, I'm just curious, are are lower rates to come from the Fed as big of a catalyst for big tech as they were prior to 2022, when we're in this free money market and you could have the likes of WeWork raking in cash to be able to do whatever they wanted with because cash was free. Is are we going to see the same movement in tech moving forward, even though we've had this shift to the idea that tech can still be a driver of returns even with cash being a little bit more expensive?

Yeah, it's a good question because I think the the environment for tech has certainly changed. You know, as you said before, it would be when when rates are going down, there would probably be some outperformance. I think things have changed a little bit. Sorry, the other way around, but I think the things have changed a little bit where the tech sector is somewhat macro agnostic. Uh, what people are investing in tech for is the productivity gains, knowing that it's sort of at the at the forefront, I guess, of productivity and growth for the economy. So what we would actually expect is that there could be certainly some headwinds as you go through the coming months and growth starts to slow down. But at the same time, these companies are strong enough, are probably the strongest ones to be able to pivot um, rely on their very strong balance sheets, the fact that they're very cash rich, they don't come across the same kind of problems that a number of the smaller companies would. So actually this is more about, you know, can they really deliver on the sky high earnings that investors have put on them, rather than actually to me, to my mind, what is going on in the macro backdrop.