Chief Citi equity strategist sees ‘worrisome parallels’ to 1999

Financial Times/Tobias Levkovich

Repost from 4-26-2021

“The last time we saw such an upbeat zeitgeist that did not coincide with an immediate equity market correction was in 1999 when the dotcom bubble was in full bloom.”

USAGOLD note: The NASDAQ 100 peaked in 2000 at 5000. By January 1, 2001 it stood at 2500 – a 50% decline. It finally bottomed in 2002 at just over 1000 – an 80% decline from the top. If the current NASDAQ 100 were to experience a similar decline today, it would go from the current index value of 14,000 to 2,800. Citi’s Levkovich notes that at the present “vulnerabilities exist and therefore chasing the rally does not appear to be prudent now.” The 1999 sell-off was not a storybook crash that began with a big bang. It began with a thud and then unfolded over a grueling two-year period. It did not revisit the previous high for fifteen years (February 2015).

NASDAQ 100 dot-com bust
(1994 -2005)

area chart depicting the 2000-2002 crash in the NASDAQ

Chart courtesy of WikimediaCommons • • • Click to enlarge

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