The stock market's gains are almost entirely concentrated in the 'Magnificent 7' - and that could mean a crash is coming

All good things must end. I'm Phil Rosen, reporting from New York. This is the final edition of 10 Things Before the Opening Bell.

It's been such an honor being in your inbox each morning for the last two years. Thank you for sharing your mornings with me.

But don't worry — I'll still be writing for Insider! Please keep in touch. You can follow me on Twitter and LinkedIn, and reach me via email: prosen@insider.com.

Moving forward, you'll be receiving our flagship newsletter, Insider Today, which some very smart colleagues of mine are revamping as we speak. I'd love if you could fill out this quick, five-question survey to let us know what you'd like to see.

For one last time, let's get to the news.

1. Have you heard of the Magnificent Seven? No, not the 1960 Western film (or its 2016 remake) — but the most dominant stocks on the market that analysts can't stop fawning over.

I don't fault them. The list of top market performers is a veritable who's who of household names: Nvidia, Tesla, Alphabet, Apple, Meta, Microsoft, and Amazon.

This handful of Big Tech stocks have accounted for nearly all the market's gains in 2023.

Nvidia, for its part, reached a trillion-dollar valuation for the first time ever last month, and Tesla has seen a meteoric 137% climb this year.

Apple, Microsoft, Alphabet, and Amazon have all climbed between 35% and 55%, with Apple on the brink of becoming the first-ever company to hit a $3 trillion valuation.

The names that make up the so-called Magnificent Seven are now the seven biggest US-listed stocks.

But some strategists think this isn't necessarily good news.

"When there's a narrow group of leaders, there's a big risk if something bad happens to tech," Minerva Analysis founder Kathleen Brooks told Insider recently.

If interest rates climb even higher, she warned, then growth stocks like these could start to tumble.

John Hussman, the president of Hussman Investment Trust who called the market crash in 2008, wrote in a recent note that the narrow, tech-heavy bias for the recent rally means big losses are coming.

"If you want my opinion on the bull/bear debate," Hussman said, "which will change as market conditions change, my impression is that the current market advance is a narrow and selective speculative blowoff – a bear market rally driven by fear of missing out on the resumption of a bubble that is actually in the early stage of collapse – and that the equity market is likely to suffer profound losses over the completion of the full market cycle."

Are you buying or selling the Magnificent Seven? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.

In other news:

2. US stock futures rise early Friday, as investors brace for data on personal consumption expenditures, a key inflation gauge. Check out the latest market moves.

3. Earnings on deck: Heiwado Co, Record PLC, and more, all reporting.

4. Goldman Sachs expects small-cap stocks to outperform the S&P 500 over the next year. Over that stretch, the Russell 2000 could deliver roughly 14% returns — here's how investors can capture that upside.

5. Costco is taking a page out of Netflix's playbook and cracking down on shared membership cards. Wall Street is thrilled — here's why.

6. China's economic recovery looks "doomed to fail," according to think tank experts. Chinese President Xi Jinping will likely back away from his plans for consumption-led growth, since shifting away from an investment-focused approach could spark backlash.

7. The labor market has been more resilient than anyone expected, yet Americans still feel lousy about the economy. Over the last three years, unemployment has had far less sway over optimism. Everyone's instead been focused on how much inflation eats into wages.

8. Stocks are about to suffer serious losses, according to a notorious bear who called the 2000 and 2008 crashes. He expects a brutal sell-off as valuations hover near historic extremes. To him, the current rally is far too niche and speculative.

9. This batch of low-risk stocks are expected to nearly triple the S&P 500's gains over the next year. Strategists from Goldman Sachs made the case for names they think will be low in volatility and high in returns. Here's the full list of 39.

10. Sure, Apple is a great company — but there's actually not much that is driving it toward a $3 trillion valuation. At least that's what Cleo Capital's Sarah Kunst said. In her view, fundamentals aren't what's fueling its latest rally.

Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email prosen@insider.com.

Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.