Live Markets: The bar keeps rising on this stock picker's market

Microsoft

Mon 16:09

Main US indexes green; Nasdaq out front, up ~1%
Tech leads S&P 500 sector gainers; Communication services is weakest group
Euro STOXX 600 Index up ~0.8%
Dollar, gold gain; bitcoin ~flat; US crude dips
US 10-year Treasury yield edges down to ~4.98%
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THE BAR KEEPS RISING ON THIS STOCK PICKER'S MARKET
If investors needed another reminder that this is a stock picker's market, Brian Belski, chief investment officer at Humilis Investment Strategies, says last week's trading action offered one.
In his latest Belski Brief, he argues that selectivity is becoming increasingly important, especially among the largest technology names.
"The days when the Magnificent Seven moved in the same direction appear to be over," Belski wrote on Monday. With capital spending still running at elevated levels, he said investors are increasingly demanding proof that those investments will ultimately generate meaningful returns.
Last week's reaction to Meta Platforms META.O, he argues, underscored how closely investors are scrutinizing the link between spending and results. While the long-term opportunity tied to artificial intelligence remains significant, the market is becoming less willing to simply take companies at their word. Instead, investors want evidence that massive investments are translating into tangible business benefits.
Belski argues the recent pullback from record highs has been relatively mild, but the market is sending a clearer message: leadership can no longer be taken for granted.
That theme could face another test this week as Alphabet GOOGL.O, Microsoft MSFT.O and Amazon AMZN.O report results and the Federal Reserve delivers its latest policy decision. Belski said he expects earnings and guidance to further reinforce the importance of company-specific fundamentals in a market where the major indexes may not tell the full story.
In his view, opportunities remain abundant, but leadership increasingly has to be earned. Humilis believes this earnings season could further widen the gap between winners and losers as investors reward companies that can back growth ambitions with results.
     
(Terence Gabriel)
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