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Investing.com — Stock market growth will extend beyond a narrow group of stocks over the medium term, Citi analysts predict.
In the U.S. stock market in particular, the so-called “Magnificent Seven” group of companies: Nvidia (NASDAQ:), Apple (NASDAQ:), Microsoft (NASDAQ:), Google-owned Alphabet (NASDAQ:), and Facebook parent company Meta is attracting attention. Platform (NASDAQ:), Amazon (NASDAQ:) and Tesla (NASDAQ:) — have soared for much of the past 12 months. These alone account for about 40% of the benchmark's total returns so far this year, according to Citi analysts.
Meanwhile, in Europe, three companies accounted for most of the gains: luxury goods giant LVMH, semiconductor supplier ASML (AS:), and pharmaceutical company Novo Nordisk (NYSE:).
“While this does not necessarily pose a risk to our constructive outlook for global equities, it does bring our broader themes back to the fore,” Citi analysts said.
In a note to clients on Friday, it expected annual revenue to expand in all major regions except Australia and in all sectors except energy. Overall, global revenue is expected to grow 9% this year, slightly below the consensus estimate of 11%.
They added that this trading environment will favor cyclical companies, or stocks that tend to rise or fall depending on the overall performance of the economy. Among these stocks, Citi analysts said they prefer sectors such as technology and industrials, as well as financial services.
“Ultimately, stock performance [20]”The 24th is likely to be about earnings announcements,” Citi analysts said.
