Why the Bull Market Isn't Like the Dot-Com Bubble

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Aug. 26 (Bloomberg) -- Bloomberg's Oliver Renick explains how the current bull market in U.S. stocks is different than the dot-com bubble of the late 1990s. He speaks with Julie Hyman on "Street Smart." (Source: Bloomberg)

Than estimated data on durable goods as well as consumer confidence, and energy stocks led the gains during the session.

And with stocks hitting new highs on a regular basis, not just today, some are comparing this to the dot com bubble of the 1990's, but there is something different.

This is something that has been talked about for months now.

Are we seeing a bubble in certain areas of the market?

We even heard janet yellen talk about this.

What is the big difference between now and then?

There are several, but what is the big, key difference?

Looking at it from sort of a top-down perspective, the bull market trajectory that has been taken does resemble some of those dot com gains back in the 1990's, but when you look at the companies, it is a strong corporate earnings and a strong economy.

What it boils down to is there are a lot better valuations.

They are only about half as high as they were when you compare back to the dot com era, so it is not the same level, and in addition to that, we have companies gaining across the board.

These market gains have been impressive, and it has not been in that one particular sector.

You do have gains in biotech, for example, and the momentum stocks.

They may be gaining more at certain times, but they are not the only ones that are going up, by any stretch.

If you look at the yearly basis how many stocks in the s&p 500 are seeing gains, it has been about 380 stocks every year for the past several years, and if you look back at that figure in the dot com era, it was only about 300 companies seeing the gains, so it is across a lot of a different spectrum.

As we mentioned, 2000 was a big deal.

Let's take a look back and look at what sort of got us to this level.

What has been propelling us here.

Quantitative easing has been a huge deal for the market, bringing money in the market, and when you look at where interest rates have been, if you have had money, where else would you put it?

Stocks have been the place to put your money, and on top of that, there are companies that have dividends, which can be would you can get in other dividend classes, and we have seen some pullback, but nothing anywhere close to this, unless the market sees a real correction, and even though there are things going on in the geopolitical scene, it has not

This text has been automatically generated. It may not be 100% accurate.


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