Overview forecast of a 40-50% Market Cap Decline in MAG7 Stocks on the US Economy. Implications of declining saving rates
The “Magnificent Seven” (Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla) have a combined market capitalization of approximately $15.76 trillion​(Stock Analysis)​(markets.businessinsider.com). These seven tech giants play a significant role in the overall health of the stock market and the US economy due to their substantial weighting in major indices (such as the S&P 500), their contribution to innovation, and their employment and tax contributions.
Understanding Stock Splits: Their Mechanics and the risks to Financial Stability and the Economy
Stock splits are a common corporate action wherein a company increases the number of its shares while proportionally reducing the stock price. The company’s market capitalization remains unchanged, but shareholders end up with more shares. For example, in a 2-for-1 stock split, every existing share is divided into two, and shareholders receive an additional share for each one they hold, while the price per share is halved.
The Current State of Hedge Funds’ Leverage and Implications for Big Banks
Hedge funds, known for their aggressive and often highly speculative investment strategies, have leveraged their portfolios to extraordinary levels in recent years. Hedge fund leverage has surged to an unprecedented $28 trillion, marking a significant risk factor within the financial system.
