Weekly Market Commentary

Mega-cap stocks, which have outlier market capitalizations and are often referred to as ‘the generals,’ have made an impressive comeback this year. Last year’s headwinds of higher rates underpinned by aggressive Federal Reserve (Fed) tightening have finally abated. Interest rate stabilization, signs of receding inflation, and a potential peak in the terminal rate by this summer have helped bring buyers back into the space. Rising recession odds in the U.S. have further increased the relative attractiveness of mega-caps, as investors have shown a growing propensity for higher quality, well-established companies with sustainable growth profiles and fortress balance sheets.

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