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Macro Nugget: The Mag 7s are increasingly just the market

Concentration in SPX is at an all time high

Concentration in the U.S. equity market is at its all time high, as evidenced by the three-month rolling correlation between the S&P 500 (SPX) and the S&P 500 Equal Weight Index (SPW) reflecting the dominance of a few large-cap stocks within the broader market. The nature of float-adjusted ETFs, which allocate more weight to stocks with higher market capitalizations, ensures that as these large-cap stocks appreciate, they command an even larger portion of the index, thus increasingly making the Mag 7s the market. 


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