Markets
Market Snapshot: Most Assets Hurting, but One Stock Market Bucked the Trend
Market Snapshot: September 2015
Deutsche Bank recently provided a graphical snapshot that covers the returns of a wide span of assets both YTD and since the mid-August meltdown. In addition, they added some market commentary on the situation investors find themselves in as they get back in gear for the autumn.
First, let’s recap the spring and summer. Chinese markets started the year with gusto, but lost all of the gains during the summer as the bubble burst. Equity markets in the U.S. soon followed, with the Dow shedding almost 2,000 points in August before beginning a small bounce back. Commodities have all been crushed thoroughly YTD and especially in the last two weeks of August.
Despite all of this, there is one stock market that has bucked these trends with outperformance.
That market belongs to Russia, where equities are up 26% on the year and have remained relatively flat since all other markets melted down in mid-August. Russian stocks are not rising because the country’s economy is healthy – they are up because it is less worse than investors thought.
The quick story on Russia: the country is in its worst recession since the Financial Crisis, and had its GDP shrink -4.6% up to Q2 of this year. The ruble has depreciated against the U.S. dollar by 16% YTD, and it also lost plenty of purchasing power last year as oil prices got hammered.
Many spectators had expected the re-emergence of a currency crisis similar to 1998. Adding in possible geopolitical tail risks, publications started to recommend ways to play the Russian crash. Instead, it seems so far that Russia has been able to stabilize better than expected, and as a result stocks have rewarded investors that weren’t so pessimistic.
Markets
3 Reasons Why AI Enthusiasm Differs from the Dot-Com Bubble
Valuations are much lower than they were during the dot-com bubble, but what else sets the current AI enthusiasm apart?

3 Reasons Why AI Enthusiasm Differs from the Dot-Com Bubble
Artificial intelligence, like the internet during the dot-com bubble, is getting a lot of attention these days. In the second quarter of 2023, 177 S&P 500 companies mentioned “AI” during their earnings call, nearly triple the five-year average.
Not only that, companies that mentioned “AI” saw their stock price rise 13.3% from December 2022 to September 2023, compared to 1.5% for those that didn’t.
In this graphic from New York Life Investments, we look at current market conditions to find out if AI could be the next dot-com bubble.
Comparing the Dot-Com Bubble to Today
In the late 1990s, frenzied optimism for internet-related stocks led to a rapid rise in valuations and an eventual market crash in the early 2000s. By the time the market hit rock bottom, the tech-heavy Nasdaq 100 Index had dropped 82% from its peak.
The growing enthusiasm for AI has some concerned that it could be the next dot-com bubble. But here are three reasons that the current environment is different.
1. Valuations Are Lower
Stock valuations are much lower than they were at the peak of the dot-com bubble. For example, the forward price-to-earnings ratio of the Nasdaq 100 is significantly lower than it was in 2000.
Date | Forward P/E Ratio |
---|---|
March 2000 | 60.1x |
November 2023 | 26.4x |
Lower valuations are an indication that investors are putting more emphasis on earnings and stocks are less at risk of being overvalued.
2. Investors Are More Hesitant
During the dot-com bubble, flows to equity funds increased by 76% from 1999 to 2000.
Year | Combined ETF and Mutual Fund Flows to Equity Funds |
---|---|
1997 | $231B |
1998 | $163B |
1999 | $200B |
2000 | $352B |
2001 | $63B |
2002 | $14B |
Source: Investment Company Institute
In contrast, equity fund flows have been negative in 2022 and 2023.
Year | Combined ETF and Mutual Fund Flows to Equity Funds |
---|---|
2021 | $295B |
2022 | -$54B |
2023* | -$137B |
Source: Investment Company Institute
*2023 data is from January to September.
Based on fund flows, investors appear hesitant of stocks, rather than overly exuberant.
3. Companies Are More Established
Leading up to the internet bubble, the number of technology IPOs increased substantially.
Year | Number of Technology IPOs | Median Age |
---|---|---|
1997 | 174 | 8 |
1998 | 113 | 7 |
1999 | 370 | 4 |
2000 | 261 | 5 |
2001 | 24 | 9 |
2002 | 20 | 9 |
Many of these companies were relatively new and, at the peak of the bubble in 2000, only 14% of them were profitable.
In recent years, there have been far fewer tech IPOs as companies wait for more positive market conditions. And those that have gone public, the median age is much higher.
Year | Number of Technology IPOs | Median Age |
---|---|---|
2020 | 48 | 12 |
2021 | 126 | 12 |
2022 | 6 | 15 |
Ultimately, many of the companies benefitting from AI are established companies that are already publicly traded. New, unproven companies are much less common in public markets.
Navigating Modern Tech Amid Dot-Com Bubble Worries
Valuations, equity flows, and the shortage of tech IPOs all suggest that AI is different than the dot-com bubble.
However, risk is still present in the market. For instance, only 33% of tech companies that went public in 2022 were profitable. Investors can help manage their risk by keeping a diversified portfolio rather than choosing individual stocks.

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