CIO calls a new phase in the market, says a 'healthy' rotation has begun

Stock markets are entering a new phase characterized by a broadening of last year’s bull market. The CIO of a Swiss private bank believes that prominent U.S. tech stocks will be under pressure, leading to a rotation of investments. These tech stocks, including Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla, now make up around 30% of the S&P 500 index’s market capitalization. The market experienced a challenging start to 2024, with the index snapping a nine-week winning streak. The CIO predicts a technical recession followed by a recovery for the U.S. economy. The recent market weakness may indicate a moderation of the excessively optimistic sentiment that fueled last year’s rally.