Connect with us

Markets

This Stunning 3D Map Shows U.S. Economic Contribution by City

Published

on

This Stunning 3D Map Shows U.S. Economic Contribution by City

This Stunning 3D Map Shows U.S. Economic Contribution by City

The United States economy makes up about 23.3% of global output and boasts annual economic productivity of $17.3 trillion. In the past, we’ve shown a visualization comparing all of the world’s economies, a direct comparison between the economies of the United States and China, and even the U.S. GDP by a state-by-state comparison.

Today’s 3d visualization, using recent data from the U.S. Bureau of Economic Analysis, shows the country’s economy based on the relative economic output of each metropolitan area.

The results show how much cities and populous areas really contribute to a country’s output, with an impressive 52% of total GDP created in America’s 20 top metropolitan areas.

New York City’s metropolitan area, which includes Newark and Jersey City, alone makes up $1.5 trillion of economic productivity. That’s good for about 10% of the United States’ total GDP.

The Greater Los Angeles area was the second largest individual contributor with $866 billion in GDP, and Chicago’s metropolitan area adds $610 billion to the U.S. GDP. It turns out Texas is no slouch either, with the Houston and Dallas metro areas combining to produce over $1 trillion in tandem.

Original graphic by: HowMuch.net

Click for Comments

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?

Published

on

Two bubbles sized according to the forward p/e ratio of the Nasdaq 100 Index during the dot-com bubble (60.1X) and the current AI Enthusiasm (26.4x).

Published

on

The following content is sponsored by New York Life Investments

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.

DateForward P/E Ratio
March 200060.1x
November 202326.4x

Source: CNBC, Barron’s

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.

YearCombined ETF and Mutual Fund Flows to Equity Funds
1997$231B
1998$163B
1999$200B
2000$352B
2001$63B
2002$14B

In contrast, equity fund flows have been negative in 2022 and 2023.

YearCombined 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.

YearNumber of Technology IPOsMedian Age
19971748
19981137
19993704
20002615
2001249
2002209

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.

YearNumber of Technology IPOsMedian Age
20204812
202112612
2022615

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 isn’t shaping up to be the next 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.

Visual Capitalist Logo

Explore more insights from New York Life Investments.

Click for Comments

You may also like

Subscribe

Continue Reading

Subscribe

Popular