The Nasdaq 100 Index is reliving the glory days of 1998 and 1999.
(Bloomberg) — The Nasdaq 100 Index is reliving the glory days of 1998 and 1999.
The tech-heavy gauge, home to the likes of Nvidia Corp., Apple Inc and Microsoft Corp. has surged 42% year-to-date. That’s ahead of where it was at this point in 1998 and 1999, when full-year returns amounted to 82% and 100% respectively.
“The market has been partying like it’s 1999 this week,” Deutsche Bank macro strategist Jim Reid writes, noting that “growing hopes of a soft landing” were fueling the surge in stocks as well as bonds.
The latest leg of the rally was fueled by signs that US inflation and interest rates are near their peak, with two-year Treasury borrowing costs dropping as much as 30 basis points in the past week.
Amid the euphoria, some might see warnings, recalling that the bumper gains of 1998 and 1999 gave way to big losses in each of the following three years.
Reid writes however that regardless of what eventually happens, investors’ hopes were focusing on a positive economic outcome.
“It’s hard to stand in the way of that narrative at the moment,” he added.
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