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MAG 7? MORE LIKE 'LAG 7'...

While equity markets in Europe and China have powered ahead in 2025, U.S. shares, which have been the driving force over the last two years, have struggled.

On Thursday the Nasdaq slipped 2.6%, taking it more than 10% from its December 16 closing level, confirming a correction.

Of the so-called "Magnificent 7", only Meta META.O trades in the green this year. The rest are down between 5.8% to 34.7%, with Tesla TSLA.O being the biggest laggard.

"Within the U.S., we've made a decision to reduce our exposure to tech," said Nathan Sweeney, CIO of multi-asset solutions at Marlborough.

"The Mag 7 is now called the Lag 7," he added.

That's a view shared by BofA strategist Michael Hartnett, who notes that the group has seen $3 trillion wiped from its market cap since the emergence of China's low-cost AI model DeepSeek.

In contrast, China's "Fab Four" of Baidu 9888.HK, Alibaba 9988.HK, Tencent 0700.HK and Xiaomi 1810.HK have doubled to $1.6 trillion.

"DeepSeek = 'Magnificent 7' now 'Lagnificent 7'," Hartnett said.

More broadly, Sweeney is neutrally positioned on U.S. equities, expecting earnings to broaden out.

"Deregulation will benefit the many, not just the few at the top," he said, "plus there's potential for changes to tax as well."

(Samuel Indyk)

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