In the Spotlight
Two Questions on U.S. Equities with…Julian Cook
Portfolio Specialist Julian Cook discusses his outlook and expectations for U.S. growth companies.
2024-07-04 19:45
Key Insights
  • Given the high concentration at the top of the U.S. equity market, Portfolio Specialist Julian Cook discusses the potential for a broadening of market performance in 2024.
  • Differentiation is becoming evident within the ‘Magnificent Seven’ stocks. Portfolio Specialist Julian Cook details why this is healthy for the broader U.S. equity market outlook.
  • Portfolio Specialist Julian Cook discusses some key areas within the U.S. equity landscape where he is currently finding attractive growth opportunities.
Transcript
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Concentration and dispersion in the market is actually, you know, pretty intense.

You look at the performance in the first quarter: About 70% of the performance of the growth benchmark was down to four stocks. In terms of dispersion, within the Mag 7[1], there's some really high-flyers: the top performer, NVIDIA, up over 80%; Tesla down over 30[2].

So, seeing that differentiation come through in Mag 7 is also very healthy.

I think that, coupled with earnings expectations in the S&P broadening out to other areas of the market, gives us a fair chance that we should see some broadening out as you look forward from here.

To put it into perspective, 2023 was a huge year in U.S. growth, and it's getting more difficult to find idiosyncratic ideas that you can really have conviction in.

Having said that, we're finding really interesting ideas in fintech, particularly those payment companies where you see this move from cash into online.

In health care, we really like orthopedics, robotic surgery, your GLP-1s.

So, we find that area very interesting.

And then finally, even in energy, we're finding an increased investment in offshore drilling, which we think will bode really, really well for those companies that service that industry.

[1] The “Magnificent 7” are Apple, Alphabet, Amazon.com, Meta, Microsoft, NVIDIA, and Tesla. The specific securities identified and described are for informational purposes only and do not represent recommendations. Past performance is not a reliable indicator of future performance.

[2] First quarter performance quoted is year-to-date, as of April 16, 2024. Source: Refinitiv Eikon, analysis by T. Rowe Price.

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1 The “Magnificent 7” are Apple, Alphabet, Amazon.com, Meta, Microsoft, NVIDIA, and Tesla. The specific securities identified and described are for informational purposes only and do not represent recommendations. Past performance is not a reliable indicator of future performance.

2 First quarter performance quoted is year-to-date, as of April 16, 2024. Source: Refinitiv Eikon, analysis by T. Rowe Price.

Important Information

This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action.

The views contained herein are those of the authors as of June 2024 and are subject to change without notice; these views may differ from those of other T. Rowe Price associates.

This information is not intended to reflect a current or past recommendation concerning investments, investment strategies, or account types, advice of any kind, or a solicitation of an offer to buy or sell any securities or investment services. The opinions and commentary provided do not take into account the investment objectives or financial situation of any particular investor or class of investor. Please consider your own circumstances before making an investment decision.

Information contained herein is based upon sources we consider to be reliable; we do not, however, guarantee its accuracy. Actual outcomes may differ materially from any forward‑looking statements made.

Past performance is not a reliable indicator of future performance. All investments are subject to market risk, including the possible loss of principal. All charts and tables are shown for illustrative purposes only.

T. Rowe Price Investment Services, Inc., and T. Rowe Price Associates, Inc. 

© 2024 T. Rowe Price. All Rights Reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the Bighorn Sheep design are, collectively and/or apart, trademarks of T. Rowe Price Group, Inc.

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