Mag 7 pulling the earnings of the S&P 500

Bull equity market's performance comprises two primary factors: valuation multiple expansions and earnings growth. Although the broader S&P 500 has reaped benefits from the former, earnings growth has remained subdued, particularly outside the tech mega-caps commonly referred to as the Magnificent 7. Notably, for the Mag 7, the combined forecast and actual first-quarter 2024 earnings estimate has surged by 58% since November 2022. However, for the remaining 493 companies in the S&P 500, this figure has actually decreased by 8.4% over the same period. It is evident that investors have exhibited excessive optimism regarding earnings overall, yet they have arguably not been optimistic enough about the prospects of the Magnificent 7.