The so-called growth trade has taken a back seat in recent months as the markets have rotated into cyclical and more-defensive sectors such as financials, industrials, materials, utilities, health care, and staples. But there's a growth name that is standing out, according to the charts. This shift in the market is likely a result of recent economic data starting in early July that strongly suggested the first Fed rate cut since 2020 is on the horizon.
Despite the broadening of the breadth, many market watchers are calling this market rally into question and calling for a recession because the growth trade led by the 'Magnificent 7' and semiconductors have been lagging the broader market. I wonder if this is collectively the same group that doubted the bull market when it was rallying on narrow breadth led by the Mag 7. If you set the flagship growth sector technology, and the semiconductor industry, aside and look at the communications sector you see a strong uptrend, a sector ETF that just made new all-time highs, and some large-cap growth stocks like Meta, Netflix and Spotify ready to potentially rip to new highs.
Before we dive in, it's notable that the Communication Services Select Sector SPDR Fund (XLC) is making new highs while the largest market cap stock in it Alphabet is well off the all-time highs. That goes to show how strong some of the individual companies are in the communications sector. Today we'll revisit Meta (META) , the second largest market cap name in t.