{"id":369362,"date":"2025-11-10T14:39:13","date_gmt":"2025-11-10T14:39:13","guid":{"rendered":"https:\/\/www.europesays.com\/us\/369362\/"},"modified":"2025-11-10T14:39:13","modified_gmt":"2025-11-10T14:39:13","slug":"k-shaped-economy-can-also-be-found-in-sp-500-says-apollo-with-magnificent-7-the-winners","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/369362\/","title":{"rendered":"K-shaped economy can also be found in S&P 500, says Apollo, with Magnificent 7 the winners"},"content":{"rendered":"

The economy is a tale of two halves at present, with wealthy consumers reporting confidence in their outlook, while those at the lower end of the income ladder reportedly feel they\u2019re living in a recession\u2014albeit without widespread job losses. <\/p>\n

This is what economists are calling a \u2018K-shaped economy,\u2019 where the fortunes of two distinct sets of consumers are increasingly diverging over time. <\/p>\n

Part of this growing divide between the rich and the average worker can also be traced back to where these households derive their wealth\u2014namely from their exposure to the booming stock market of 2025.<\/p>\n

After a bumpy week<\/a>, markets are buoyed today on the news that America\u2019s government shutdown may soon be drawing to a close. At the time of writing, the S&P 500 and Dow Jones are up a meager 0.1%, although the VIX volatility index has dropped, signaling that markets are expecting turbulence to subside. S&P 500 futures are up by more than 1%, indicating a return to bullish sentiment.<\/p>\n

Markets in Europe are also up across the board in early trading, with Germany\u2019s DAX, France\u2019s CAC 40 and Spain\u2019s IBEX 35 all up by more than 1%. In London, the FTSE 100 is up 0.7%. <\/p>\n

The good news has also spread to Asia, where Japan\u2019s Nikkei 225 is up 1.26% and Hong Kong\u2019s HSI is up 1.55%. <\/p>\n

The return of an upbeat outlook on the stock market is good news, of course, for the investors who derive their wealth from the markets. But it\u2019s good news for the economy, too.<\/p>\n

As Moody\u2019s chief economist, Mark Zandi, highlighted in a note yesterday: \u201cIt\u2019s hard to overstate the significance of the soaring stock prices of artificial intelligence companies to the economy. Spending by well-off Americans, driven by their surging stock portfolios, is the single most significant driver of growth. <\/p>\n

\u201cThis so-called wealth effect is responsible for nearly half a percentage point of real GDP growth over the past year, accounting for one-fourth of the economy\u2019s overall growth.\u201d <\/p>\n

Zandi has previously argued that the prospects of the economy<\/a> are hinged on the fortunes of the wealthy, and added in his note this weekend: \u201cIt is prudent to consider how sustainable this is.\u00a0And if it isn\u2019t, what does it mean for future growth?\u201d<\/p>\n

The wins and the potential for future success are also becoming increasingly concentrated, according to research from the Apollo Academy.<\/p>\n

A note last week from chief economist Torsten Slok titled \u2018K-Shaped Economy for Firms\u2019 outlined how, since earlier in 2025, earnings expectations have increased for the Magnificent Seven and declined for the S&P 493. The Magnificent 7 are a group of American household names (Apple<\/a>, Amazon<\/a>, Google<\/a> owner Alphabet, Meta<\/a>, Microsoft<\/a>, Nvidia<\/a>, and Tesla) that have doubled down on AI\u2014not only deploying it within their own businesses and bringing new products to market, but also investing in the infrastructure needed to build out the transformative technology.<\/a><\/p>\n

For example, a graph charting the 2025 EPS consensus estimates for the S&P 500 between October 2025 and April 2025 shows that estimations, on average, have dropped by approximately 0.2%. <\/p>\n

However, consensus estimates for the Magnificent 7<\/a> have increased by a little under 4% between October and April, while the remaining 493 stocks in the S&P 500 have dropped by approximately 1.5%.<\/p>\n

\"\"<\/p>\n

Here\u2019s a snapshot of the markets ahead of the opening bell in New York this morning:<\/strong><\/p>\n