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Diverging fortunes for the massive technology and growth names that have propelled the U.S. stock market higher are throwing a spotlight on their pricey valuations.

The so-called “Magnificent Seven” are collectively trading at an average of 33 times their expected earnings for the next 12 months, up from 26 at the end of 2022, according to LSEG Datastream.

That compares with a price-to-earnings ratio of about 21 for the benchmark S&P 500 index, which has risen over 7% this year.

Investors last year were happy to pay up for the megacaps, given the companies’ solid balance sheets and dominant positions atop their industries.

They have been more discriminating this year, punishing the shares of Tesla and Apple when their outlooks turned murky while fueling dizzying gains in Nvidia.

“When you get to those kinds of valuations you have no room for failure, no room for disappointment,” said Mike Mullaney, director of global markets research at Boston Partners.

Concerns about electric vehicle demand have sparked a near 35% drop in the shares of the former market darling Tesla this year, making it the S&P 500’s worst performer.

The stock traded at about 65 times forward earnings at the start of the year, and is down to about 50.

Another Magnificent Seven member, Apple, has ceded its perch as the biggest U.S. company by market value to Microsoft after its shares declined 10% year-to-date, amid pressure in its China business. The stock’s P/E has fallen from 29 to 25.

Meanwhile, chipmaker Nvidia, which trades at about 35 times earnings, has soared about 80% as it established a dominant position in artificial intelligence applications.

AI optimism has also helped drive a nearly 40% gain in Meta Platforms. The Facebook parent trades at 24 times earnings.

By contrast, the Magnificent Seven last year advanced about 50% for Apple to over 230% for Nvidia. Because of the stocks’ heavy weighting in the S&P 500, the group’s performance accounted for over 60% of the index’s appreciation last year.

The S&P 500 rose 24% in 2023.

Markets are awaiting the coming week’s Federal Reserve policy meeting, which concludes on Wednesday.

A strong economy and sticky inflation have lowered investor expectations for how much the central bank will cut rates this year, leading to a rise in Treasury yields that could pressure stocks if it continues.

Investors gauging whether Nvidia can parlay its massive lead in AI computing into long-term dominance will be watching the company’s developer conference, set to kick off on Monday.

Though AI optimism has helped lift a swath of the Magnificent Seven, many investors are grappling with how to weigh the technology’s potential in their valuation models.

“We are in a unique cycle here with AI, so we are struggling to make sure we optimize the opportunity of this massive transitional shift in technology,” said Ken Laudan, portfolio manager for the Buffalo Large Cap Fund, which holds the seven stocks but is underweight them on a combined basis.

While robust earnings have supported the Magnificent Seven’s valuations, the group’s growth trajectory is due to moderate later this year or early next, said Jeffrey Buchbinder, chief equity strategist for LPL Financial.

“At that point, markets may not want to pay double the P/E for this group,” said Buchbinder, pointing the Magnificent Seven’s trailing P/E of 41 versus 23 for the S&P 500.

Many investors remain sanguine regarding the Magnificent Seven’s valuations.

Five of the seven are trading below their five-year median P/E ratios, while the group is trading more cheaply versus the market than a few years ago, JPMorgan strategists said this week.

Nvidia’s P/E has actually fallen from nearly 60 a year ago as analysts increase their profit forecasts for the chipmaker.

“These are companies that are cranking out enormous amounts of cash, very strong balance sheets, visible sources of revenue growth,” said Katie Nixon, chief investment officer for Northern Trust Wealth Management.

But Apple and Tesla’s shares have recently fallen below their 200-day moving averages. Though the rest of the group are above that mark, more of the Magnificent Seven dropping below their trend lines could be a “warning sign” for the market, Citigroup analysts said.

If the Magnificent Seven “start to go down absolutely you could reverse a lot of the recent almost euphoric sentiment,” said Sameer Samana, senior global market strategist at the Wells Fargo Investment Institute.

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Entertainment

Cassie tells court ‘freak offs’ became like a job as she alleges years of abuse by Sean ‘Diddy’ Combs

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Cassie tells court 'freak offs' became like a job as she alleges years of abuse by Sean 'Diddy' Combs

Sean “Diddy” Combs’s former girlfriend Cassie has told his sex-trafficking trial that “freak offs” with male escorts became like a job, as the music mogul allegedly abused and sexually exploited her for years.

The musician and model, whose full name is Casandra Ventura, did not look at Combs as she took to the witness stand in court in Manhattan, New York.

Over about six hours, the 38-year-old, who is eight months pregnant with her third child with husband Alex Fine, at times became emotional as she alleged she was degraded by her former partner during their 10-year on-off relationship.

Sean ‘Diddy’ Combs trial: Day 2 – As it happened

Sean 'Diddy' Combs makes a hand gesture to family members at his New York trial. Pic: Reuters
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Combs made a heart gesture to family members in court. Pic: Reuters/Jane Rosenberg

Sean "Diddy" Combs watches as former girlfriend Casandra "Cassie" Ventura reacts during testimony to prosecutor Emily Johnson at Combs' sex trafficking trial in New York City, New York, U.S., May 13, 2025 in this courtroom sketch. REUTERS/Jane
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Ms Ventura became emotional at times. Pic: Reuters/Jane Rosenberg


Combs, 55, has pleaded not guilty and strenuously denied allegations of sexual abuse. His lawyers argue that although he could be violent, he never veered into sex trafficking and racketeering, and that all sexual encounters were consensual.

Ms Ventura, who is the central witness in the prosecutors’ case, began by telling the jury how Combs was violent to her over the course of their relationship, giving her black eyes and bruises.

The hip-hop star became increasingly controlling, she said, and was allegedly abusive over the smallest perceived slights. “You make the wrong face, and the next thing I knew I was getting hit in the face,” she said.

Ms Ventura was 19 when she signed to his label, Bad Boy, she said, and 22 when, during the first year of their relationship, Combs first proposed a “freak off” – a sexual encounter with a third party. Her “stomach churned”, she said, and she was “confused, nervous, but also loved him very much” and wanted to please him. She described him as “charming” but “polarising”.

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Combs’s family arrive for Day 2

‘There was no space to do anything else’

Throughout her time on the stand, she gave graphic details of these drug and drink-fuelled encounters with male escorts, saying Combs would watch and masturbate, and often record the encounters and watch the videos back.

They could last for hours or even days, she said – telling the court the longest went on for four days. They ended up becoming weekly events and took priority over her music career, jurors heard. While she had hits with singles Me & U and Long Way 2 Go in 2006, and signed a 10-album deal with Bad Boy, jurors heard she only released one album.

“Freak-offs became a job where there was no space to do anything else but to recover and just try to feel normal again,” Ms Ventura said. Each time, she added, she had to recuperate from lack of sleep, alcohol, drugs “and other substances”, and “having sex with a stranger for days”.

Read more:
The rise and fall of Sean Combs

Diddy – a timeline of allegations
Everything you need to know about the trial

Sean 'Diddy' Combs and Cassie Ventura at the 2017 Costume Institute Benefit Gala ub 2017. Pic: zz/XPX/STAR MAX/IPx 2017/AP
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Combs and Cassie pictured in 2017. Pic: zz/XPX/STAR MAX/IPx 2017/AP

Alleged violence detailed in court

Ms Ventura told the court she began feeling as if she could not say no to Combs’s demands because “there were blackmail materials to make me feel like if I didn’t do it, it would be held over my head in that way or these things would become public”.

She was also worried about potential violence, she told the court. When asked in court how frequently Combs became violent with her, Ms Ventura responded: “Too frequently.”

The rapper “would mash me in the head, knock me over, drag me, kick me”, she said. “Stomp me in the head if I was down”.

Ms Ventura also told the court that Combs kept cash, jewellery, guns and “sometimes tapes from cameras” in safes at several properties in New York, Los Angeles, Miami and Alpine, New Jersey.

“The guns came out here and there. I always felt it was a little bit of a scare tactic,” she told the court.

Pic: CNN via AP
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This footage from 2016 was made public in 2024. Pic: CNN via AP

Towards the end of her first day of evidence, a surveillance video made public last year, which showed Combs allegedly beating Ms Ventura at a Los Angeles hotel in 2016, was played to jurors in court for a second time.

“How many times has he thrown you like that before?” prosecutor Emily Johnson asked her.

“Too many to count,” Ms Ventura replied.

On Monday, prosecutors in their opening statement told the court that while Combs’s public persona was that of a “charismatic” hip-hop mogul, behind the scenes he was violent and abusive.

His defence lawyers argued that the case is really about nothing more than the rapper’s sexual preferences, which they said should remain private, and do not make him a sex trafficker.

The trial is to last about eight weeks.

Ms Ventura is set to continue giving evidence on Wednesday.

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Sports

What to know about MLB lifting ban on Pete Rose, ‘Shoeless’ Joe Jackson

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What to know about MLB lifting ban on Pete Rose, 'Shoeless' Joe Jackson

Pete Rose, Joe Jackson, seven other members of the 1919 Chicago “Black Sox”, six other former players, one coach and one former owner are now eligible to be voted on for the Hall of Fame after commissioner Rob Manfred removed them from Major League Baseball’s permanently ineligible list.

Hall of Fame chairwoman Jane Forbes Clark said in a statement: “The National Baseball Hall of Fame has always maintained that anyone removed from Baseball’s permanently ineligible list will become eligible for Hall of Fame consideration. Major League Baseball’s decision to remove deceased individuals from the permanently ineligible list will allow for the Hall of Fame candidacy of such individuals to now be considered.”

Due to Hall of Fame voting procedures, Rose and Jackson won’t be eligible to be voted on until the Classic Era Baseball committee, which votes on individuals who made their biggest impact prior to 1980, meets in December of 2027.

Let’s dig into what all this means.


Why were these players banned?

All individuals on the banned list who were reinstated had been permanently ineligible due to accusations related to gambling related to baseball — either throwing games, accepting bribes, or like Rose, betting on baseball games.

Most of the banned players, including Jackson and his seven Chicago White Sox teammates who threw the 1919 World Series, played in the 1910s, when gambling in baseball was widespread. As historian Bill James once wrote, “Few simplifications of memory are as bizarre as the notion that the Black Sox scandal hit baseball out of the blue. … In fact, of course, the Black Sox scandal was merely the largest wart of a disease that had infested baseball at least a dozen years earlier and had grown, unchecked, to ravage the features of a generation.”

The most famous player, of course, was Jackson, one of baseball’s biggest stars alongside Ty Cobb and Tris Speaker in the 1910s. While many have tried to exonerate Jackson through the years, pointing out that he hit .375 in the 1919 World Series, baseball historians agree that Jackson was a willing participant in throwing the World Series and accepted money from the gambling ring that paid off the White Sox players.

While the White Sox players were acquitted in a criminal trial in 1921, commissioner Kenesaw Mountain Landis banned the eight players in a statement that began with the words “Regardless of the verdict of juries …”

If there was an innocent member in the group, it was third baseman Buck Weaver, not Jackson. Weaver had participated in meetings where the fixing of the World Series was discussed, and Landis banned him for life for guilty knowledge.

As for Rose, he was banned in 1989 by commissioner A. Bartlett Giamatti for betting on games while he was manager of the Cincinnati Reds, including those involving his own team. While Rose denied the accusations for years, he eventually confessed. He died last September at age 83.


Who else is impacted?

Phillies owner William Cox was banned in 1943 and forced to sell the team for betting on games. Cox had just purchased the team earlier that season. None of the other non-White Sox players are of major significance, although Benny Kauff was the big star of the Federal League in 1914-15, winning the batting title both seasons. The Federal League was a breakoff league that attempted to challenge the National and American leagues.


When is the soonest Rose and Jackson could go into the Hall of Fame?

The Hall of Fame voting process for players not considered by the Baseball Writers’ Association of America — such as Rose and Jackson, who never appeared on the ballot due to their banned status — includes two eras: the Contemporary Baseball Era (1980 to present) and the Classic Baseball Era (pre-1980). The voting periods are already set:

December 2025: Player ballot for the Contemporary Era.

December 2026: Contemporary Era ballot for managers, executives and umpires.

December 2027: Classic Era ballot for players, managers, executives and umpires.

Each committee has an initial screening to place eight candidates on the ballot, so Rose and Jackson will first have to make the ballot. While it’s unclear how a future screening committee will proceed, it’s possible that both will make the ballot. While comparisons to players with PED allegations aren’t exactly apples to apples — since they were never placed on the ineligible list — it’s worth noting that Barry Bonds, Roger Clemens and Rafael Palmeiro were included on the eight-player Contemporary Era ballot in 2023.

Once the ballot is determined — a 16-person committee consisting of Hall of Fame players, longtime executives and media members or historians — convenes and votes. A candidate must receive 12 votes to get selected. In the most recent election in December, Dave Parker and Dick Allen were on the Classic Era ballot.


Which players have the best HOF cases?

Obviously, Rose would have been a slam-dunk Hall of Famer had he never bet on baseball and had he appeared on the BBWAA ballot after his career ended. The all-time MLB leader with 4,256 hits, Rose won three batting titles and was the 1973 NL MVP. And while he’s overrated in a sense — his 79.6 career WAR is more in line with the likes of Jeff Bagwell, Brooks Robinson and Robin Yount than all-time elite superstars — and hung on well past his prime to break Ty Cobb’s hits record, his popularity and fame would have made him an inner-circle Hall of Famer.

Whether he’ll get support now is complicated. Bonds and Clemens both received fewer than four votes in 2023. The committee usually consists of eight former players, and they may not support Rose given the one hard and fast rule that every player knows: You can’t bet on the game.

Jackson, meanwhile, was a star of the deadball era, hitting .408 in 1911 and .356 in his career, an average that ranks fourth all time behind only Cobb, Negro Leagues star Oscar Charleston and Rogers Hornsby. He finished with 62.2 WAR and 1,772 hits in a career that ended at age 32 due to the ban. Those figures would be low for a Hall of Fame selection, although the era committees did recently elect Allen and Tony Oliva, both of whom finished with fewer than 2,000 hits. And again, it is hard to say how the committee will view Jackson’s connection to gambling on the sport.

The only other reinstated player with a semblance of a chance to get on a ballot is pitcher Eddie Cicotte, who won 209 games and finished with 59.7 WAR. While his final season came at 36, the knuckleballer was still going strong, having won 29 games for the White Sox in 1919 and 21 in 1920 before Landis banned him.

For what it’s worth, the top position players in career WAR who made their mark prior to 1980 and aren’t in the Hall of Fame are Rose, Bill Dahlen (75.3), Bobby Grich (71.0), Graig Nettles (67.6), Reggie Smith (64.6), Ken Boyer (62.8), Jackson and Sal Bando (61.5).

Pitching candidates would include Luis Tiant (65.7), Tommy John (61.6) and Wes Ferrell (60.1). John was on the recent ballot and received seven votes. Others on that ballot included Steve Garvey, Boyer, Negro Leagues pitcher John Donaldson, Negro Leagues manager Vic Harris and Tiant.

Other potential pre-1980 candidates could include Thurman Munson, Bert Campaneris, Dave Concepcion and Stan Hack.

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Politics

Civil service relocation and AI officials at heart of government cost cutting measures

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Civil service relocation and AI officials at heart of government cost cutting measures

AI civil servants and sending human workers out of London are at the heart of the government’s plans to cut costs and reduce the size of the state bureaucracy.

Shrinking the civil service has been a target of both the current Labour and recent Conservative governments – especially following the growth in the organisation during the pandemic.

From a low in 2016 of 384,000 full time workers, in 2024 there were 513,000 civil servants.

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The Department for Science, Innovation and Technology is claiming a new swathe of tools to help sift information submitted to public consultations could save “75,000 days of manual analysis every year” – roughly the work of 333 civil servants.

However, the time saved is expected to free up existing civil servants to do other work.

The suite of AI tools are known as “Humphrey”, after Humphrey Appleby, the fictional civil servant in the TV comedy Yes, Prime Minister.

The government has previously said the introduction of AI would help reduce the civil service headcount – with hopes it could save as much as £45bn.

Speaking today, Technology Secretary Peter Kyle appeared to take aim at expensive outsourcing contracts, saying: “No one should be wasting time on something AI can do quicker and better, let alone wasting millions of taxpayer pounds on outsourcing such work to contractors.”

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March: 10,000 officials could go

Move outside of London

Other money-saving plans announced today include moving 12,000 civil servants out of London and into regional hubs – with the government hoping it can save almost £100m by 2032 by not having to pay for expensive leases of prime office space in the capital.

Currently, 95,000 full time civil servants work in London.

Tens of millions of pounds a year are expected to be saved by the closure of 102 Petty France, which overlooks St James’s Park, and 39 Victoria Street, which is near the previous location of New Scotland Yard.

In total, 11 London offices are slated for closure, with workers being relocated to the likes of Aberdeen, Belfast, Darlington, Bristol, Manchester and Cardiff.

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The reforms of the civil service are being led by Chancellor of the Duchy of Lancaster Pat McFadden – one of Sir Keir Starmer’s most influential ministers.

Mr McFadden said: “To deliver our plan for change, we are taking more decision-making out of Whitehall and moving it closer to communities all across the UK.

“By relocating thousands of civil service roles we will not only save taxpayers money, we will make this government one that better reflects the country it serves. We will also be making sure that government jobs support economic growth throughout the country.

“As we radically reform the state, we are going to make it much easier for talented people everywhere to join the civil service and help us rebuild Britain.”

The government says it wants senior civil servants out of the capital too – with the aim being that half of UK-based senior officials work in regional offices by the end of the decade.

The government claims the relocations and growth of regional hubs could add as much as £729m to local economies by 2030.

Pat McFadden delivers a keynote speech to the CyberUK conference.
Pic: PA
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Pat McFadden is leading the changes to the Civil Service. Pic: PA

Union welcome – cautiously

Unions appear to cautiously welcome the changes being proposed.

All of Prospect, the PCS and the FDA say it is positive to see better opportunities outside of the capital.

However, they have asked for clarity around whether roles may be lost and what will be offered to people transferring.

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Fran Heathcote, the general secretary of the PCS union, said: “If these government proposals are to be successful however, it’s important they do the right thing by workers currently based in London.

“That must include guarantees of no compulsory redundancies, no compulsory relocations and access to more flexible working arrangements to enable them to continue their careers should they wish to do so.”

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