Title: Wall Street’s Interest Shifts from Tech to Dividend-Paying Stocks, Says CNBC’s Jim Cramer
In a recent statement, CNBC’s Jim Cramer noted that Wall Street’s infatuation with the “Magnificent Seven” tech stocks has faded, with dividend-paying stocks now attracting more attention.
Cramer stated, “The market has, momentarily, fallen out of love with the Mag Seven. This is a new market — that’s right — where the mega cap techs are no longer the leaders.”
The dominance of the mega cap tech stocks, including Apple, Alphabet, Meta, Microsoft, Amazon, Nvidia, and Tesla, throughout 2023 has shifted in light of the rise in U.S. government bond yields. An index tracking these tech stocks has underperformed the equally-weighted S&P 500 as a result.
According to Cramer, the growing belief that the Federal Reserve will reduce interest rates has led investors to find more value in dividend stocks. This change has resulted in a “rotation” away from Big Tech, with investors using profits from the Magnificent Seven to invest in banking, healthcare, REITs, and utilities. Cramer emphasized that this shift in interest does not diminish the quality of the tech stocks, and the rotation is not expected to be permanent.
While dividend-paying stocks have currently captured the market’s attention, Cramer expressed confidence that the Magnificent Seven will eventually regain their prominence.
Those interested in following Jim Cramer’s investment strategies can sign up for the CNBC Investing Club. However, it’s important to note that the CNBC Investing Club Charitable Trust holds shares of Apple, Alphabet, Meta, Microsoft, Amazon, and Nvidia, as disclosed in a disclaimer at the end of the article.