While we remain positive on equities in general, we believe that we are at the beginning of a market rotation from mega-growth stocks to broader market equities.

 

As you can see from the chart below, the top 10 largest S&P 500 companies make up 37% of the index. This is an all time high. While it is possible this ratio continues to go higher, we believe the broader market is considerably cheaper and may offer some benefit to investors in terms of a risk-adjusted return. Combine that with the fact that the consumer price index actually dipped 0.1% on Thursday, which makes it considerably more likely that the Federal Reserve goes through with a rate cut in September.

 

 

 

 

I have also included a piece from our CIBC economics team entitled “Seeking shelter from shelter inflation”.

 

As always, if you have any questions, please feel free to give us a call at any time.

 

Have a great weekend.

 

Milan