Market Musings 140226: Continued Rotation to Cyclicals from Tech

Market Musings 140226: Continued Rotation to Cyclicals from Tech
Podcast this week:Our Investment Strategy for February 2026 (click on link to listen)1 Continued breakdown in US mega-cap tech
As estimates rise for AI/data centre investment spending by US hyperscalers (including Oracle) to over $650bn for this year - far in excess of the huge amount already spent in 2025 - concerns rise over the rise in debt funding necessary and the long-term profitability to come from this massive wave of investment.
Breakdown in Mag 7 momentu

2 Rotation in US stocks to Equal-Weight Samp;P 500, Small-Caps
With under-performance of the US mega-cap tech and software stocks comes a rotation in performance towards other sectors and small-cap segments of the US stock market. The equal-weight version of the Samp;P 500 index is outperforming its classic market cap-weighted version given its broader diversification and lower weighting to Tech. Note that over time, equal-weight indices typically outperform their cap-weighted cousins by 0.5%-1%,but that this has not been true over the last few years in the case of the US.