Good morning, investors. There’s always room for a comeback in some corner of the market at any given time.

It just so happens that, this time, it’s the biggest names making the sharpest rebound.

The Magnificent 7 just recovered months of lost ground in a single day.

The Roundhill Magnificent 7 ETF (MAGS) gained more than 4% Monday after trading slightly negative for the first seven months of the year.

It marked the group’s largest one-day gain since March and one of its eight strongest trading days on record.

The S&P 500 has needed all seven months to secure a 10.8% return, including Monday’s 1.5% gain. 

The Magnificent 7, for its part, was flat on the year as recently as last week.

But while Apple fell 1.9% to start the week, the six other stocks rallied more than 3% each.

Hyperscaler capital spending is set to jump 70% this year to surpass $700 billion, which explains why the market has turned lukewarm on the Magnificent 7.

That skepticism compressed the valuation gap between Big Tech and the rest of the market to its cheapest level in years. 

The investors who have been waiting for a catch-up trade finally have reason to celebrate.

Ambitious AI spending aside, the fundamentals for the standout names have remained, well, magnificent. 

Microsoft’s Azure is seeing 43% growth and just crossed $100 billion annual run rate while Amazon Web Services grew 37% to $42.2 billion.

Both stocks spiked double-digits after announcing earnings last week.

Meanwhile, Alphabet’s Google Cloud business grew 82% to $24.8 billion, numbers that allowed investors to ignore its first quarter of negative free cash flow ever.

The three companies together added nearly $1.5 trillion in combined market cap in a single week, underscoring the market’s satisfaction with the current ROI for AI spending.

Veteran investors know that one day does not make a trend. But the Magnificent 7 stocks do seem to have plenty of runway ahead after being ignored for so many months. 

At least for the trading session, the market suddenly seems to be treating the largest capex cycle in history as a catalyst rather than a red flag. 

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Governments print. We stack bitcoin & gold.

📈 The Dow hit a new record high Monday. Big Tech’s momentum helped lift the entire index with a 1.3% gain on the day. Stocks across the board finished higher with the largest and “growthiest” names leading the charge. (Yahoo Finance)

💥 Iran said there are no peace talks with US. The country’s foreign ministry said discussions are ongoing regarding the Strait of Hormuz reopening, while President Trump said Tehran is “unbelievably duplicitous.” (WSJ)

📉 GameStop fell 12% on a $1.4 billion debt-for-equity swap. The retailer will hand over Class A stock to noteholders in exchange for zero-coupon convertibles due 2030 and 2032, cutting long-term debt without spending cash. (Quartz)

📊 The July jobs report due Friday is the next macro indicator. Economists expect 85,000 to 91,000 payrolls following June's 57,000 print, and the unemployment rate is seen rising to 4.3%. (Yahoo Finance)

🗓 August 4, 2011: The Dow fell 4.31% for its steepest single-day drop since the 2008 financial crisis on account of Europe's debt panic and US recession fears.

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Partner disclosures:

ISBG uses Bitcoin, Gold, and Stock options and do not invest directly in bitcoin, gold, or stocks. The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Derivative prices are highly volatile and may fluctuate substantially during a short period of time. The use of leverage by the Fund, such as borrowing money to purchase securities or the use of options, will cause the Fund to incur additional expenses and magnify the Fund’s gains or losses.

The Fund is not suitable for all investors. The Fund is designed to be utilized only by knowledgeable investors who understand the potential consequences of seeking daily leveraged (2X) investment results, understand the risks associated with the use of leverage, and are willing to monitor their portfolios frequently. The Fund is not intended to be used by, and is not appropriate for, investors who do not intend to actively monitor and manage their portfolios. For periods longer than a single day, the Fund will lose money if the Target Portfolio’s performance is flat, and it is possible that the Fund will lose money even if the Target Portfolio’s market value increases over a period longer than a single day. An investor could lose the full principal value of his/her investment within a single day.

There is no guarantee the Quantify Funds ETFs will make weekly distributions and the amounts may fluctuate from week to week. Distributions may be comprised of option premiums, dividends, capital gains, and interest payments. To view both current and historical monthly estimates of ETF distribution composition, investors may view the 19a-1 notices available on each corresponding Fund's webpage. Distributions classified as return of capital will reduce an investor’s cost basis in Fund shares owned, which may result in higher taxes paid in the future when the Fund shares are sold, even if the shares are sold at a loss compared to the original investment. 

Investing involves risk. Principal loss is possible. Distributed by Foreside Fund Services, LLC.

Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses.

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