Mar 10, 2025
Twenty-five years ago, the fun of the Dot Com boom came to an end. Roughly beginning in December 1994 with the release of the first internet browser, Netscape, the Nasdaq would go on to rally just under 600% through the closing high set on March 10, 2000. After that high, the index declined with persistent losses as it didn’t find a bottom until over two and a half years later in October 2002. By then, the index was down 77.8% from its high, and it wasn’t until 2015 that the Nasdaq eventually reclaimed those prior highs. Fast forward to today, even though the Nasdaq has once again pulled back from its most recent highs, the index is now up 250% since that Dot Com peak and is up almost 1,500% since the 2002 low.
A quarter century later, the Nasdaq is once again in the midst of a new technical revolution with the emergence of AI. Additionally, while on March 10, 2000, the Nasdaq hadn’t quite started to roll over, today it is in a significant drawdown having fallen 13% from the December 16 high. In the chart below, we show the drawdowns in the Nasdaq in the year after the 2000 high versus the current drawdown so far since the December peak. As shown, the pullback off of the Dot Com high was much more rapid that what has been seen lately. For the comparable number of trading days, the Nasdaq was already closing in on a 40% decline in 2000 versus only a 13% drop currently. Additionally, this latest drop has seen the Nasdaq actually trade sideways for about a month before things really started to fall off a cliff in the past couple of weeks.
While the move off of the recent high doesn’t exactly line up with the Dot Com era, using a different starting point shows a much greater correlation. Below we show the performance of the Nasdaq in the three and five years following the releases of Netscape and ChatGPT. As shown, the two lines have tracked one another remarkably well including this latest pullback.
Mar 6, 2025
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we kick off with a look at the S&P 500’s price action around the 200-DMA (page 1) followed by a dive into the Nasdaq entering correction (page 2). We then provide a decile analysis of Russell 1,000 stocks in today’s session (page 3) followed by a look at the S&P 500 being the most oversold of 22 country ETFs (page 4). Afterward, we provide some further insights from the Beige Book (page 5) and close out with a look into the latest layoff data (page 6).
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Mar 6, 2025
In a post yesterday, we discussed the historic surge in German equities, which is even more historic when framed relative to US equity performance. We further discussed the topic of international stock outperformance concerning valuations in today’s Chart of the Day. In the matrix below, we show the performance of 22 country ETFs since the US election in November, year to date in 2025, and month to date in February. We also show each ETF’s distance from 52-week highs and where they currently trade relative to their 50-DMAs.
On average, developed markets have massively outperformed since the election and year to date. Whereas the former are up an average of 5.5% since November, emerging markets have averaged a nearly 5% decline. More recently, looking in the young month of March, developed markets are again collectively outperforming but by a much smaller margin. The single best performer and the only one currently trading at a 52-week high is Germany (EWG). EWG has risen an impressive 7% since the end of last week, bringing it deeply into overbought territory. However, that isn’t even the most overbought country ETF. Hong Kong (EWH) is trading over 3 standard deviations above its 50-DMA for the country’s most overbought reading since October. Meanwhile, all the way at the other end of the spectrum by pretty much each measure is the US (SPY). The S&P 500 has now erased close to all its post-election gains after falling the most of any country month-to-date. As such, it is also the single most oversold country ETF on this list.
