JP Morgan's Earnings Broadening Note: Non-Mag7 Growth Drives Market Trends (2025-11-17)

This analysis is based on JP Morgan’s note highlighting earnings growth broadening beyond the Magnificent7 tech stocks [1][2]. Key findings include S&P500 companies excluding the Magnificent7 delivering a 12% earnings growth rate—their best in years [1]. On November17, non-tech sectors led market gains: Energy (+3.1%), Utilities (+2.16%), followed by Tech (+2.03%) [0]. The S&P500 closed up 0.43% at $6742.29 [0]. Exxon Mobil (XOM) reported strong Q3 results (Guyana production >700k bpd, Permian >1.7M boe/d) contributing to Energy sector outperformance [3].

1. Broadening Growth
   : Reduced market reliance on the Magnificent7, with non-tech sectors driving earnings gains.
2. Market Rotation
   : JP Morgan’s advice to rotate towards lagging sectors aligns with observed non-tech leadership [1].
3. Regional Differences
   : US ex-Mag7 growth is robust, but Eurozone Q3 earnings were subdued (+1% YoY) with 2026 improvement expected [1].

• Opportunities
  : Non-Mag7 sectors (Energy, Utilities) present growth potential amid broadening earnings [0][3].
• Risks
  : Energy sector performance is tied to commodity price volatility [3]; Eurozone 2026 earnings may miss consensus (15% vs JP Morgan’s median estimate of10%) [1].

JP Morgan’s note identifies a shift in earnings growth to non-Mag7 stocks, with US ex-Mag7 delivering a12% growth rate. Non-tech sectors (Energy, Utilities) led market gains on November17, supported by strong results from companies like XOM. Regional disparities exist, with Eurozone earnings still subdued. Investors should monitor commodity prices and Eurozone indicators for potential impacts on non-Mag7 sectors.