Pre-Market Prep: The Hidden Winners of Nasdaq's "Great Rebalancing"

The $8 Billion Meta windfall that has Musk seething [Money Morning LIVE] Dow Jones | 34,394 | 0.14% S&P 500 | 4,509 | 0.86% Nasdaq | 15,571 | 1.73% *prices as of 4:00 pm 7/13/23 --------------------------------------------------------------- Friday, July 14, 2023 The Hidden Winners Of Nasdaq's "Great Rebalancing" By Alex Kagin --------------------------------------------------------------- One of the most notable trends in the stock market this year has been the meteoric rise of mega-cap tech. These companies have outperformed all other sectors of the equity market, and their dominance has become increasingly concentrated. Currently, the seven largest companies account for over 54% of the Nasdaq 100. While this has been a hot topic for investors, there's always been a significant weighting of the top several companies in any index. In reality, the top end of the stock market is unique in its ability to generate high earnings and market performance. This is difficult to replicate with cheaper stocks, as they often lack the brand power, technology leadership, global reach, and management strength of the best-in-class leaders. So, when the announcement was made about rebalancing the Nasdaq, I didn't expect much of a move. A special rebalance has only happened twice before, in 1998 and 2011. And the largest companies saw almost no impact. In fact, in 2011, Apple Inc. (AAPL) made up more than 20% of the Nasdaq 100. But when it was rebalanced to a mere 12%, Wall Street analysts viewed this as an opportunity to buy on weakness. But something else much more interesting happened on the other end of the spectrum. [That's when I immediately jumped on the phone with Garrett {NAME}. He was on his way down to FreedomFest, where he told me exactly why he's watching this event](... --------------------------------------------------------------- Follow the Money Garrett {NAME} --------------------------------------------------------------- Yesterday morning, I directed a panel of global economists and political activists whose twin passions are economic freedom and human progress. The panel consisted of publishing executive Steve Forbes, Austrian economist Dr. Barbara Kolm, and Preity Üpala, a former investment banker turned Hollywood actress and entrepreneur. At the panel's start, my first question was directed to Forbes. I noted - as I've done here - that the United States has dropped like a stone on the Heritage Economic Freedom Index, from 8th to 25th, over the last 15 years. "Steve," I asked, "what happened, and how do we right this ship?" [Forbes' answer hit like a freight train - he'd uncovered places in America where opportunity is still very much alive](... --------------------------------------------------------------- Across Money Morning --------------------------------------------------------------- The "Weird" Signal to Watch this Earnings Season... One sector is climbing the Wall of Worry. Another is sliding down the Slope of Hope. Chris Johnson reveals the stocks to watch and the ones to avoid, thanks to this "weird" signal. [Find out if your portfolio is at risk](... The Best Energy Stock on the Market... and the Best Spaghetti in Memphis... Garrett {NAME}'s late-night craving for Italian comfort food out on the road unexpectedly led him to a $5 stock with at least 40% upside potential. [Dig in - mangia]( CPI Puts Gold in the Crosshairs... A fairly tepid inflation reading this week sent stocks soaring. But we're not out of the woods... at least not yet. 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That's how long Threads needed to gain 100 million users. But the real story here is for investors. The potential upside is enormous. We're talking another [$8 billion]( per year in revenue and another $1.50 per share in earnings by 2025. That's how much Evercore sees Threads adding to Meta's balance sheet. Keep in mind, when Elon Musk acquired Twitter, it had 240 million daily active users. Threads is the fastest app in history ever to 100 million users, able to easily tap and convert Instagram's 1.6 billion users. They've got their sights set on Twitter. And now you understand why Musk wants to punch Mark Zuckerberg so badly in the face... Meta is one of the "Magnificent 7" - responsible for much of 2023's gains. But we're minutes away from the Nasdaq's "Great Rebalancing." Money Morning's Garrett {NAME} is on a mission to help investors, going LIVE from FreedomFest in a couple hours to explain what this move means for the markets and your portfolio. 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