---
title: "US stock market rally expected to spread! After the \"Big Seven Tech Giants\" take the stage alone, sector rotation is poised to gather momentum."
type: "News"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/news/107194422.md"
description: "The head of US stocks and quantitative strategies at Bank of America has stated that if US money market yields decline, there will be a large influx of funds into the US stock market. However, not all of these funds will necessarily flow into the stocks of the seven tech giants. There is still room for growth in the Pro UltrPro Shrt S&Pro 500, and there are opportunities to increase holdings in the financial, real estate, non-essential consumer goods, and energy sectors. As for essential consumer goods, healthcare, and information technology sectors, it is recommended to reduce allocation weights. In addition, the year-end target for the Pro UltrPro Shrt S&Pro 500 is expected to be 5,100 points."
datetime: "2024-02-01T07:10:06.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/107194422.md)
  - [en](https://longbridge.com/en/news/107194422.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/107194422.md)
---

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# US stock market rally expected to spread! After the "Big Seven Tech Giants" take the stage alone, sector rotation is poised to gather momentum.

Zhitong App learned that Savita Subramanian, the head of US stocks and quantitative strategy at Bank of America, recently stated that if US money market yields start to decline, there will be a "large amount of capital" flowing into the US stock market, but not necessarily all into the currently hottest "Magnificent Seven" tech giants. Subramanian emphasized that Pro UltrPro Shrt S&Pro 500 can continue to rise for a long time without being led by the "Magnificent Seven" tech giants, and the year-end target point is expected to rise to at least 5100 points (closing at 4845 points as of Wednesday).

The seven tech giants in the US stock market include Apple, Microsoft, Alphabet-C, Tesla, Nvidia, Amazon, and Meta Platforms.

Subramanian recently stated in an interview with the media, "The environment we are in is that many sectors of Pro UltrPro Shrt S&Pro 500 (S&P 500) have investment opportunities because dividend yields have been suppressed for a long time." She said that assuming the Federal Reserve's federal funds rate has peaked, about 85 stocks in Pro UltrPro Shrt S&Pro 500 are expected to have dividend yields higher than the cash benchmark rate in the next three years.

**Subramanian believes that there are "buying opportunities" in the financial sector (related ETF: XLF), real estate sector (XLRE), non-essential consumer goods sector (XLY), and energy sector (XLE) of Pro UltrPro Shrt S&Pro 500; as for the essential consumer goods sector (XLP), healthcare sector (XLV), and the information technology sector (XLK) with the highest concentration of tech stocks, Subramanian suggests "reducing allocation weight."**

"The pricing of large tech companies can be said to be perfect," she said. "**They have met profit expectations, and some have slightly exceeded expectations, but it is not enough to truly make everyone enthusiastic because we are already in a phase where buyers hold a large amount of these stocks. Compared with other stocks in the market, their valuations are relatively expensive and there is relatively more selling pressure.**"

Subramanian emphasized that as the possibility of a soft landing in the US economy increases, Pro UltrPro Shrt S&Pro 500 can continue to rise for a long time without being led by the "Magnificent Seven" tech giants. BlackRock, the world's largest asset management giant, also stated this week that the narrative logic of a soft landing is expected to support a major rebound in US stocks and extend it beyond the tech giants. She said in an interview, "Even if the 'Big Seven Tech Giants' perform mediocrely for the rest of this year, the other stocks in the US stock market have basically reached their long-term average P/E ratios. Therefore, the Pro UltrPro Shrt S&Pro 500 is expected to reach 5,100 points by the end of this year, even higher than our target."

She also mentioned that the expansion of the market's gains had only lasted for a nanosecond before a reversal occurred, and the upward trend continued to be concentrated in the Big Seven Tech Giants. "The market depends on the macroeconomic situation, and the labor market is slowing down but not collapsing. A soft landing seems to be getting closer."

"I believe we are in a structurally tight labor market environment," she said. "The wave of layoffs is most severe in Silicon Valley and Wall Street, but the situation in other parts of the United States seems relatively optimistic. There have been some layoff announcements, but it is not enough to cause us great concern at the moment."

"If the US economy achieves a soft landing, the Big Seven Tech Giants in the US stock market may no longer dominate."

Building on the 24% increase in the Pro UltrPro Shrt S&Pro 500 in 2023, the US stock market has continued its strong bull market rally this year. However, the continuous rise in the stock market has raised concerns about the imbalanced upward trend driven by the Big Seven Tech Giants. But as the possibility of a soft landing in the US economy increases, most analysts are optimistic about the upward trend of US stocks outside of the Big Seven Tech Giants.

As the possibility of a soft landing in the US economy increases, most analysts are optimistic about the upward trend of US stocks outside of the Big Seven Tech Giants. With better-than-expected US GDP growth, sustained cooling of inflation, resilient retail sales, and a strong labor market, some investment institutions generally predict that the US economy will successfully achieve a soft landing.

In a report on Monday, BlackRock, the world's largest asset management firm with $10 trillion in assets under management, upgraded its overall rating on US stocks from "neutral" to "overweight." BlackRock's bullish tactical forecast is based on a 6 to 12-month timeframe, assuming that the US Federal Reserve, on the occasion of its first interest rate cut in over three years, successfully achieves an economic soft landing.

"Since the market tends to focus on a short-term theme, the narrative logic of a soft landing will be able to support a major rebound in US stocks within our tactical range and extend it beyond the tech giants. Therefore, we recommend overweighting US stocks," wrote BlackRock's US stock strategists.

Dan Suzuki, Deputy Chief Investment Officer at Richard Bernstein Advisors, said, "One of the reasons why the Big Seven Tech Giants lead the US stock market is that the trend of US economic growth is neither too strong nor too weak." Dan Suzuki said that if the US economy accelerates its growth and achieves a soft landing, the upward trend of US stocks will expand beyond the seven tech giants to other companies that can ensure profit growth. This may lead to a classic rotation market or a trend of profit recovery, shifting towards cheaper cyclical stocks. Investors will become "comparison shoppers" in the general sense, commonly known as "shopping around".

Philip Orlando, Chief Equity Strategist at Federated Hermes, prefers value stocks over tech stocks. Value stocks are defined as stocks that are cheap relative to book value or high dividends, and are currently mainly concentrated in the financial, consumer, and healthcare sectors. He emphasized, "Investors will be attracted to these stocks' low P/E ratios and high dividend yields. Frankly, these stocks were on the verge of collapse last year, and this year is their time to rise."

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