The president of Yardeni Research, a sell-side Wall Street firm, has identified signs of a broadening bull market with momentum shifting towards small and mid-cap (SMID) stocks.
According to Ed Yardeni, the ratio of the S&P 100 to the S&P 500 may have peaked at the end of last year. He believes that this shift indicates a lower risk of a bubble bursting compared to when the market was more concentrated in tech names.
Yardeni recently moved to underweight on the Magnificent 7 tech stocks, marking the firm’s first departure from being overweight on the sector in 15 years. He notes that the tech giants are now engaged in a competitive “Game of Thrones” environment.
In his latest analysis, Yardeni mentions that SMID stocks have been outperforming large caps, although he cautions that this trend could potentially be a false signal.
The veteran Wall Street analyst highlights the evolving dynamics in the market and the impact of the AI arms race on the tech sector’s landscape.
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