Star clusters to make stock constellations

economictimes.indiatimes.com:

Goldman Sachs, which coined the term BRICS, has come up with monikers for stocks driving stock market rallies in Europe and Japan, alongside the US' 'Magnificent Seven' — Apple, Microsoft, Alphabet, Amazon, Tesla, Meta and Nvidia. European 'Granolas' — GSK, Roche, ASML, Nestle, Novartis, Novo Nordisk, L'Oreal, LVMH, AstraZeneca, SAP and Sanofi — are a more diversified grouping than the US tech constellation. Yet, the 11 companies are still tightly packed around lifestyle, with the occasional presence of software.

Japan's 'Seven Samurai' — Screen Holdings, Advantest, Disco, Tokyo Electron, Toyota, Subaru and Mitsubishi — are clustered around chips and manufacturing. Investors globally are betting on a remarkably small clutch of sectors to push equity markets to record highs as the macroeconomic dominos keep falling. Europe is narrowly dodging a recession, Japan has dipped into it, and the US is likely to have a much softer landing.

The 25 companies that have grown to their current heft on cheap credit may be better placed to operate in a higher interest rate environment.

That does not help their less endowed rivals from accessing credit with banks choosing to lend to the big boys and investors chasing only a select few. Banks, which are missing from all three groupings, are more tightly regulated since the global financial crisis. An era of cheap energy is also ending with conflict rearing its head.