The top-ranked fear is that the Nasdaq tailspin is following the script from the post-peak bear market of 2000-2002.
Anxiety and trauma sufferers are sometimes asked to define a hierarchy of fears that trigger distress so they might be managed.
Without having foretold the kind of rapid selling storm of recent months, I've noted here early this year that there are just enough parallels to keep the worry flowing: Years of tech-stock dominance, heavy market concentration among a handful of digital-economy winners, star fund managers who embodied "new era" thinking while disdaining traditional valuation methods.sell-off somewhat resembles the action after the March 2000 bubble top, a rapid 30% drop over a matter of months.
Back then the flimsy, low-quality stocks imploded and then eventually even the high-quality winners succumbed.— then as now one of the two largest companies in the market — fell more than 60% in the 2000-'02 bear market. Cisco collapsed 90% and even reliable old Hewlett-Packard shed more than 80%. And to illustrate the gulf in valuations now versus then, Microsoft at the 2000 peak traded for more than 60-times forecast earnings and would fall to 22-times by the 2002 tech-sector trough. Its multiple peaked this cycle around 35 and is already down near 24.
Expectations of half-percentage-point rate hikes each in June and July and perhaps September are now reflected in the economic consensus and, largely, in bond prices. Last week, Powell's commentsthat he never intended this month to foreclose on the chance or a 0.75% hike didn't seem to unnerve bond traders, indicating general agreement about the policy path through summer.
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