Goldman: S&P Q4 Earnings Breadth Led by "Big 7" to Be New Indicator of Market Health

Goldman analysts believe that the growth of companies other than the "Big Seven" will be a key indicator of market health when many large US companies report their fourth-quarter 2024 financial data next month. David Kostin, a strategist at Goldman, noted in a report on January 10: "Whether the 'Big Seven' can continue to dominate depends on the change in the difference between their expected profit growth and other markets." He further analyzed that the relative performance of the "Big Seven" to the S&P 500 index is expected to narrow in 2025, but the general expected threshold for the "Big Seven" in 2025 is much lower than in the past few years. This indicates that although the "Big Seven" will still play an important role in the market, their influence on the market may be weakened, and the performance of other companies will be more focused on, becoming an important reference for assessing the overall market health. It is known that the "Big Seven" includes Apple (AAPL.US), Amazon (AMZN.US), Google (GOOGL.US), Meta Platforms (META.US), Microsoft (MSFT.US) and Tesla (TSLA.US) and their total market value accounts for about one-third of the total value of the S&P 500 index, and the fluctuation of their stock prices has a significant impact on the market benchmark. The "Big Seven" companies are expected to continue to dominate the market, but their relative performance to the S&P 500 index is expected to narrow in 2025. However, the general expected threshold for the "Big Seven" in 2025 is much lower than in the past few years. This indicates that although the "Big Seven" will still play an important role in the market, their influence on the market may be weakened, and the performance of other companies will be more focused on, becoming an important reference for assessing the overall market health.