Nigel Green, CEO of deVere Group, has flagged up seven stocks - termed "The Magnificent Seven" - as the ones that will determine the market's performance for the rest of 2023 into 2024, set to start with Tesla and Netflix reporting on Wednesday 19 July.
Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta Platforms, all report Quarter 2 earnings in the next week or so, Green notes.
"Investors around the world will be pouring over the earnings and guidance reports of these major growth and tech names in the next few days."
"These mega cap companies' values have jumped between 40% and 200% so far this year. These jumps have accounted for the bulk of the S&P 500's 17% year-to-date advance and pushed-up the main stock market in the world's largest economy to its highest level since April 2022."
"On the S&P 500, the seven stocks make up almost 30% of the index's weight. Therefore, their earnings and guidance will, we expect, determine the market's trajectory for the rest of this year and into 2024."
Green added: "The Magnificent Seven are going to need robust earnings to explain their sky-high valuations."
"In addition, they will need the guidance to indicate future quarters to be higher than aniticpated for shareholders to receive additional gains. Should this not happen, we could see these stocks shed some of the advances."
Green recently warned about investor frenzy around these stocks.
"This hype is dangerous as it could lead investors to assume that these stocks are a silver bullet to build long-term wealth - and they are not, at least not on their own."
"While I believe that exposure to these mega-cap tech stocks should be part of almost every investor's portfolio, as they have robust fundamentals and are future-focused, especially in AI, they should not be exclusive."
"Such is their weight, the Magnificent Seven earnings we receive in the next week or so will set global investors' portfolio positioning for the foreseeable future."
