May 31, 2023
Weekly Market Outlook
By Donn Goodman and Keith Schneider
While the hype of AI continues to fuel incredible moves in stocks, I vividly recall the number of investors who told me back in the early 2000’s “that they were grieving at their lost profits.”
Are we in an AI bubble? I don’t know how the market reckons with stocks like Nvidia that make the largest jump in market cap ($250 billion) in one day. However, if you look at this current period versus the late 90’s, it doesn’t appear that we are in a bubble as yet. See chart below:
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Where do we go from here?
As many of you know, I am an ardent fan of looking at the past and what recent history tells us about what we might see going forward. One of the best at this is Ryan Detrick (previously of LPL and now at the Carson Group) who conducts research on how the current market may resemble the past. We like to show his work from time to time.
The first item that caught our attention is the fact that we put in a significant low in October, 2022 and haven’t had another one since. To Ryan and a host of others, this implies that we started a new bull market and are unlikely (in their opinions) to see another low anytime soon. See chart below: