This Market Is Nothing Like the Dot-Com Bubble

A lot of people are watching this meteoric US stock market with amazement as it shakes off one worry after another – slowing labor market, sagging consumer sentiment, continuing trade uncertainty, geopolitical tensions and now a US government shutdown – on its way to new record highs. Some see a replay of the late 1990s internet bubble, this time fueled by artificial intelligence. Investors seem to be asking, in various ways, if this rally is overdone, and by implication, if the market is due a pullback.

One answer is that stocks only care about one thing — earnings growth. From that limited perspective, the future looks bright. Wall Street analysts expect that 95% of companies in the S&P 500 Index will grow earnings next year, by an average of 16%, according to estimates compiled by Bloomberg.