More weight, less resistance: Magnificent 7 short interest hits 18-month low.

The S&P 500 P/E ratio is trading at a premium relative to the Euro Stoxx index.

The average short position in the Magnificent Seven has declined this year, even as short interest in the rest of the index has continued to rise.

Short interest in the rest of the S&P 500 hit multi-year highs, while Mag 7 short interest has fallen to its lowest level in over 18 months—highlighting a clear divergence in positioning.

Over the past two years, the weighting of the “Magnificent Seven” within the S&P 500 has steadily increased.

Today, roughly 30% of the U.S. benchmark is concentrated in these seven large-cap tech stocks, whereas the Euro Stoxx index maintains only about 15% exposure to the tech sector.

The P/E of the Magnificent 7 has not expanded; only their weight has risen.

Earlier, the P/E’s were higher but possibly not meaningful, as some were in the hundreds.

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