Economics: Is the extraordinarily rapid runup in the Magnificent Seven this year a monopoly fact, a productivity fact, or a positive feedback bubble fact? What the stock market performance in 2023 tells us about the future really, really hinges on which of those three factor is the one most in play. And I have not seen a good analysis. It provides me with enough information to make any kind of reasonable judgment:

Katie Martin: Year in a World: Magnificent Seven: ‘For a short time at the start of 2023, stock markets behaved as recession-obsessed investors expected: badly. But a drab start quickly gave way to a rally dominated by a clutch of big tech names stitched loosely together through the hot theme of artificial intelligence: Apple, Microsoft, Alphabet, Amazon, Tesla, Meta and Nvidia. By June, their Magnificent Seven nickname was really starting to stick. Some element of top-heaviness is a reasonably common feature in US equities, but the Magnificent Seven (or Mag7 for short) have taken that to new extremes.… The Mag7 have gained more than 100 per cent this year and account for a massive 30 per cent or so of the index. Without them, the S&P 500 is up 11 per cent; with them, the performance is doubled…. Investors say… inflows are coming from conservative investors seeking companies that can weather a downturn, stockpickers convinced of the AI revolution, short-termists chasing high-flying stocks and index trackers following a broad index. <ft.com/content/ba909fe4…>