🕷️ Crawler Inspector

URL Lookup

Direct Parameter Lookup

Raw Queries and Responses

1. Shard Calculation

Query:

Response:

Calculated Shard: 102 (from laksa056)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa102.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical, ml_categories_json AS ml_categories_json, ml_types_json AS ml_types_json, ml_intent_types_json AS ml_intent_types_json, meta_language AS meta_language, attrs_author AS attrs_author, ifNull(toUnixTimestamp(attrs_publish_time), 0) AS attrs_publish_time, ifNull(toUnixTimestamp(attrs_original_publish_time), 0) AS attrs_original_publish_time, ifNull(attrs_is_republished, 0) AS attrs_is_republished, ifNull(attrs_nr_words, 0) AS attrs_nr_words, ifNull(attrs_boilerpipe_nr_words, 0) AS attrs_boilerpipe_nr_words, ifNull(body_ext_links_number, 0) AS body_ext_links_number, ifNull(body_int_links_number, 0) AS body_int_links_number, ifNull(meta_nofollow, 0) AS meta_nofollow, ifNull(meta_noarchive, 0) AS meta_noarchive, ifNull(props_was_rendered, 0) AS props_was_rendered, ifNull(src_redirect, \'\') AS src_redirect, ifNull(download_time_msec, 0) AS download_time_msec, ifNull(download_ttfb_msec, 0) AS download_ttfb_msec, ifNull(download_size, 0) AS download_size FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask\')), getAhrefsUnparsedNoserviceFromURL(\'https://financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask","crawl_time":1775815536,"first_indexed_time":1737284689,"http_code":200,"src_unparsed":"com,financialpost!\/investing\/us-stock-market-bubble-depends-who-you-ask s443","src_root_hash":"8058800021708526502","history_drop_reason":null,"meta_title":"Is the U.S. stock market in a bubble? It depends who you ask | Financial Post","meta_descriptions":["Some say ‘American exceptionalism’ justifies elevated valuations; other fear the signs of dot-com ‘deja vu’ are being ignored. Find out more"],"attrs_boilerpipe_text":"Skip to Content\nNews\nArchives\nEconomy\nEnergy\nOil & Gas\nRenewables\nElectric Vehicles\nMining\nCommodities\nAgriculture\nReal Estate\nMortgages\nMortgage Rates\nFinance\nBanking\nInsurance\nFintech\nCryptocurrency\nWork\nWealth\nSmart Money\nWealth Management\nInvestor\nPersonal Finance\nFamily Finance\nRetirement\nTaxes\nHigh Net Worth\nFP Comment\nExecutive Women\nPuzzmo\nNewsletters\nFinancial Times\nBusiness Essentials\nMore\nInnovation\nInformation Technology\nFP500\nPodcasts\nSmall Business\nLives Told\nTails Told\nShopping\nFinancial Post Store\nObituaries\nPlace a Notice\nAdvertising\nAdvertising With Us\nAdvertising Solutions\nPostmedia Ad Manager\nSponsorship Requests\nClassifieds\nPlace a Classifieds ad\nWorking\nProfile\nSettings\nMy Subscriptions\nSaved Articles\nMy Offers\nNewsletters\nCustomer Service\nFAQ\nNews\nEconomy\nEnergy\nMining\nReal Estate\nFinance\nWork\nWealth\nInvestor\nFP Comment\nExecutive Women\nPuzzmo\nNewsletters\nFinancial Times\nBusiness Essentials\nHome\nInvestor\nIs the U.S. stock market in a bubble? It depends on who you ask\nSome say ‘American exceptionalism’ justifies elevated valuations; other fear the signs of dot-com ‘deja vu’ are being ignored\nLast updated Mar 31, 2025\nYou can save this article by registering for free\nhere\n. Or\nsign-in\nif you have an account.\nThe New York Stock Exchange at Wall Street in New York City, U.S.\nPhoto by ANGELA WEISS\/AFP via Getty Images files\nTo say that U.S. stocks found a sweet spot the past few years would be an understatement.\nSubscribe now to read the latest news in your city and across Canada.\nExclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.\nDaily content from Financial Times, the world's leading global business publication.\nUnlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.\nNational Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.\nDaily puzzles, including the New York Times Crossword.\nSubscribe now to read the latest news in your city and across Canada.\nExclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.\nDaily content from Financial Times, the world's leading global business publication.\nUnlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.\nNational Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.\nDaily puzzles, including the New York Times Crossword.\nCreate an account or sign in to continue with your reading experience.\nAccess articles from across Canada with one account.\nShare your thoughts and join the conversation in the comments.\nEnjoy additional articles per month.\nGet email updates from your favourite authors.\nCreate an account or sign in to continue with your reading experience.\nAccess articles from across Canada with one account\nShare your thoughts and join the conversation in the comments\nEnjoy additional articles per month\nGet email updates from your favourite authors\nSign In or Create an Account\nor\nFalling inflation\n,\nlower interest rates\n, healthy corporate earnings and a strong economy sent stock markets on a two-year run that has defied even the most optimistic forecasts.\nThe S&P 500 gained 24 per cent in 2023 and 23 per cent in 2024, owing in large part to the strength of the so-called\n“Magnificent Seven” stocks\n— Apple Inc., Microsoft Corp., Amazon.com, Inc., Alphabet Inc., Meta Platforms Inc., NVIDIA Corp. and Tesla Inc. — which accounted for 53 per cent of the S&P’s returns last year and now make up more than one-third of the S&P’s total market capitalization.\nBut the unexpected rise, now-lofty valuations and an enthusiasm for\nartificial intelligence\nthat is drawing parallels to the dot-com era have some questioning whether markets are in a bubble.\nCanada's best source for investing news, analysis and insight.\nBy signing up you consent to receive the above newsletter from Postmedia Network Inc.\nA welcome email is on its way. If you don't see it, please check your junk folder.\nThe next issue of Investor will soon be in your inbox.\nWe encountered an issue signing you up. Please try again\nThat the last time the S&P 500 posted back-to-back 20 per cent gains was 1998 is only fuelling those concerns.\nDavid Rosenberg\n, founder and president of Rosenberg Research, is one who believes analysts are underestimating the “tremendous confidence in the future” driving the 2023-24 rally.\nRosenberg says AI has hit an inflection point in the technology curve where investors typically lengthen their time horizons, as they did during the internet mania of the 1990s. Eventually, the dot-com bubble burst — but only after four years of incredible growth.\n“Even knowing about the mid to late 1990s, we don’t know where we are right now in this cycle,” Rosenberg said. “Is it ’96 or ’97, or is it ’98 or ’99?”\nLikewise, Bill Smead, founder and chief investment officer at Smead Capital Management, sees warning signs in the exuberance.\nIn a Dec. 10 note to clients, Smead said investors were facing a “déjà vu moment” with bullish sentiment prevailing, record-high equity ownership by U.S. households and speculative investments such as Bitcoin hitting new highs.\n“Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears,” he said.\nFew dispute that AI will be transformative — it’s more a question of the market cycle, in which hype around new investments spirals into what former Federal Reserve Board chairman Alan Greenspan famously called “irrational exuberance” as investors drive stock prices far beyond what their fundamentals support, ending in a moderate correction or rapid freefall.\n“There’s usually a grain of truth that underlies every mania and bubble. It just gets taken too far,” Howard Marks, co-chairman of Oaktree Capital Management, wrote in a note to investors on Jan. 2. “It’s clear that the internet absolutely did change the world — in fact, we can’t imagine a world without it. But the vast majority of internet and e-commerce companies that soared in the late ’90s bubble ended up worthless.”\nBut there are differences from the dot-com bubble, which was marked by “indiscriminate bidding” for companies with no viable business plans or path to profitability, such as pet supply website Pets.com or online grocery delivery startup WebVan, said Que Nguyen, a partner at Research Affiliates in Newport Beach, Calif.\n“It didn’t really matter what you said you were doing, as long as you had a dot-com next to it,” she said.\nMany of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears\nEven profitable companies that are still around today, such as Cisco Systems, Inc., got swept up in the hype as “the multiple kept ratcheting up faster than the earnings could catch up,” Nguyen said.\nCisco’s stock price peaked at $80 in March 2000 before declining 89 per cent by October 2002. Cisco’s fortunes have since rebounded, but its stock price has never fully returned to its dot-com-era high.\nNguyen says a common parallel is chipmaker Nvidia, a poster child for the AI revolution. As of Jan. 16, Nvidia’s stock price has risen 833 per cent since the beginning of January 2023. Nvidia contributed more than 22 per cent to the S&P 500’s overall return in 2024, more than any other stock. The difference with Nvidia, Nguyen says, is that investors are taking a wait-and-see approach to justify their expectations based on Nvidia’s revenue and earnings.\n“They’re not necessarily ratcheting up the multiples ahead of the earnings the way they were doing in the tech bubble, (which) tells me that it’s optimism but it’s not unbridled euphoria, which is what you get in a bubble,” she said.\nIt also depends on your investing philosophy. Barry Schwartz, executive vice-president and chief investment officer at Baskin Wealth Management, says people who are calling it a bubble are likely dividend or value investors who don’t invest in tech stocks in the first place.\n“My argument is you’re not paying attention to what matters today. You don’t understand those business models,” he said. “You can’t say Google is expensive or Meta is expensive at 25 times earnings and compare it to your Canadian bank at 12 times earnings. There’s no mean reversion to these companies; they’re just growing and taking market share.”\nThe unprecedented growth in big tech stocks means the U.S. now dominates global markets. U.S.-listed companies made up more than half of the world’s stock market value in 2024 and 70 per cent of the MSCI World Index, which tracks 1,500 mid and large-cap companies in 23 countries.\nSome call it “American exceptionalism,” the idea that the U.S. has a unique fusion of factors — including a buoyant economy, strong dollar, educational opportunities, infrastructure, the world’s largest consumer market and many of the world’s most profitable companies — that make it inherently powerful.\n“America is still a magnet for all sorts of people seeking freedom, people seeking economic opportunities, people seeking education opportunities, people seeking jobs, people seeking to start businesses, to innovate. I think that is something that is really unique about the United States,” said Nguyen. “There are other parts of the world that have that feature, but the United States is the largest country with that feature.”\nTo others, the idea of American exceptionalism is simply attaching a narrative to price action — a “camouflage” for government deficit spending propping up growth, said Rosenberg.\n“If we are going to define exceptionalism as reckless fiscal policy, sure, let’s call it exceptionalism,” he said. “But that’s what makes America different, is that we are in the midst of an ongoing massive deficit-financed fiscal stimulus, whether it’s spending on one side of the income statement or tax subsidies on the other side of the income statement.”\nThe idea that the U.S. is inherently positioned for perpetual superiority also doesn’t sit well with everyone in other parts of the world.\nIn a Financial Times column, writer and economist Tej Parikh says America’s strengths mask some of its unflattering economic realities.\n“The fanfare over U.S. capitalism is not unfounded. But it can obscure arguments that counter the idea of U.S. economic superiority,” he wrote, citing high household spending on healthcare with worse health outcomes, high levels of credit card debt, economic growth supported by government spending and the “privileged ability” to run deficits and the fact that lower income earners are squeezed to afford necessities while high earners own the majority of equity investments.\nWhile the U.S. has scalability, liquidity and tech innovation on its side, Parikh argued in another column that there’s still opportunities for investors among European heavyweights such as LVMH Moet Hennessy Louis Vuitton SE, Nestlé S.A., Novo Nordisk A\/S and ASML Holding NV.\n“They are established, broad businesses with global exposure, low volatility and strong earnings — and some are now undervalued,” Parikh wrote, adding that Europe also has several “competitive” companies across different industries such as Glencore plc, Siemens Energy AG, Airbus SE, Adidas AG, Carl Zeiss Meditec AG and SAP SE.\n“The stellar returns of the U.S. stock market do not mean that European companies are no good,” Parikh wrote. “Rather, investors are willing to pay a premium to get exposure to AI (and Trump 2.0) — one that is looking harder to justify.”\nIn 2025, Wall Street analysts are forecasting the S&P 500 to gain anywhere from 5 per cent to 20 per cent, with most analysts predicting between 10 per cent and 15 per cent — but they are keeping an eye on how an “unusually concentrated” market will affect returns over the long term, Goldman Sachs chief U.S. equity strategist David Kostin said in a November Goldman Sachs Research newsletter.\n“Investors should be concerned about market concentration over the longer term, say 10 years, because the historical record suggests that a meaningful relationship exists between market concentration and forward returns, with high concentration associated with lower returns over longer horizons,” he said.\nAs the Magnificent Seven stocks continue their run in 2025, analysts are also keeping an eye on whether companies’ earnings can deliver on investors’ high expectations and sustain growth if strong performance is already priced in.\n“It shouldn’t come as a surprise that the return on an investment is significantly a function of the price paid for it,” Marks wrote in his note. “For that reason, investors clearly shouldn’t be indifferent to today’s market valuation.”\nYields on 10-year Treasury bonds are also creeping up to 5 per cent, posing risk-free competition to the expensive equity market and making investors anxious that higher borrowing costs will dampen corporate profits.\nBut after two years of growth beyond wildest expectations, Rosenberg says beauty is in the eye of the beholder when it comes to the animal spirits driving the market rally.\n“There’s people that believe that AI is going to produce 30 per cent of its growth over the next five years,” he said. “So, when I tell some people, ‘Well, 20 per cent is priced in,’ they say, ‘Oh my God, the market’s cheap then.’”\nBookmark our website and support our journalism:\nDon’t miss the business news you need to know — add\nfinancialpost.com\nto your bookmarks and sign up for our newsletters\nhere\n.\nJoin the Conversation\nThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about\ncookies here\n. By continuing to use our site, you agree to our\nTerms of Use\nand\nPrivacy Policy\n.","attrs_markdown":"![](https:\/\/sb.scorecardresearch.com\/p?c1=2&c2=10276888&cv=3.9.1&cj=1)\n\nAdvertisement oop\n\nStory continues below\n\nThis advertisement has not loaded yet, but your article continues below.\n\n[Skip to Content](https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask#main-content)\n\nSections\n\nSearch\n\nShare\n\n![Close](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/common-icon\/icon-close-black.svg)\n\nShare this Story : Financial Post\n\n- [Copy Link](https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask)\n- [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-circle-email.svg) Email](mailto:?Subject=I%20saw%20this%20on%20Financial%20Post&Body=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask \"Share via email\")\n- [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-tw.svg) X](https:\/\/twitter.com\/intent\/tweet?url=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&text=Financial%20Post&via= \"Share on X in new tab\")\n- [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-rdit.svg) Reddit](https:\/\/www.reddit.com\/submit?kind=link&url=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&title=Financial%20Post \"Share on Reddit in new tab\")\n- [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-pin.svg) Pinterest](https:\/\/pinterest.com\/pin\/create\/button\/?url=https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&media=https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/01\/no0117wallst.jpg \"Share on Pinterest in new tab\")\n- [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-li.svg) LinkedIn](https:\/\/www.linkedin.com\/sharing\/share-offsite\/?url=https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask \"Share on LinkedIn in new tab\")\n- [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-tblr.svg) Tumblr](https:\/\/www.tumblr.com\/widgets\/share\/tool?canonicalUrl=https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&title=Financial%20Post \"Share on Tumblr in new tab\")\n\n[Subscribe \\$20 for 1 year](https:\/\/financialpost.com\/subscribe\/recommended\/subscribe-button\/?utm_source=on-net&utm_medium=subscribe-button&utm_campaign=spring-sale&utm_content=)\n\nMy Account\n\n[Subscribe \\$20 for 1 year](https:\/\/financialpost.com\/subscribe\/recommended\/subscribe-button\/?utm_source=on-net&utm_medium=subscribe-button&utm_campaign=spring-sale&utm_content=)\n\n- [News](https:\/\/financialpost.com\/category\/news\/)\n  - 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[Investor](https:\/\/financialpost.com\/category\/investing\/)\n\n- [![Share via email](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-circle-email.svg)](mailto:?Subject=I%20saw%20this%20on%20Financial%20Post&Body=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask)\n- [![Reddit](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-rdit.svg)](https:\/\/www.reddit.com\/submit?kind=link&url=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&title= \"Share on Reddit in new tab\")\n- [![X](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-tw.svg)](https:\/\/twitter.com\/intent\/tweet?url=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&text=Financial%20Post&via= \"Share on X in new tab\")\n- [![Share on Linkedin](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-li.svg)](https:\/\/www.linkedin.com\/sharing\/share-offsite\/?url=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask \"Share on LinkedIn\")\n- ![Open more share options](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-circle-share.svg)\n  ![Close](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/common-icon\/icon-close-black.svg)\n  \n  Share this Story : Financial Post\n  \n  - [Copy Link](https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask)\n  - [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-circle-email.svg) Email](mailto:?Subject=I%20saw%20this%20on%20Financial%20Post&Body=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask \"Share via email\")\n  - [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-tw.svg) X](https:\/\/twitter.com\/intent\/tweet?url=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&text=Financial%20Post&via= \"Share on X in new tab\")\n  - [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-rdit.svg) Reddit](https:\/\/www.reddit.com\/submit?kind=link&url=https%3A\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&title=Financial%20Post \"Share on Reddit in new tab\")\n  - [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-pin.svg) Pinterest](https:\/\/pinterest.com\/pin\/create\/button\/?url=https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&media=https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/01\/no0117wallst.jpg \"Share on Pinterest in new tab\")\n  - [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-li.svg) LinkedIn](https:\/\/www.linkedin.com\/sharing\/share-offsite\/?url=https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask \"Share on LinkedIn in new tab\")\n  - [![](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/share-icons\/icon-soc-tblr.svg) Tumblr](https:\/\/www.tumblr.com\/widgets\/share\/tool?canonicalUrl=https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask&title=Financial%20Post \"Share on Tumblr in new tab\")\n\n# Is the U.S. stock market in a bubble? It depends on who you ask\nSome say ‘American exceptionalism’ justifies elevated valuations; other fear the signs of dot-com ‘deja vu’ are being ignored\n\nAuthor of the article:\n\nBy [Jane Switzer](https:\/\/financialpost.com\/author\/jswitzerpostmedia-com\/)\n\nPublished Jan 19, 2025\n\nLast updated Mar 31, 2025\n\n8 minute read\n\n[Join the conversation](https:\/\/financialpost.com\/investing\/us-stock-market-bubble-depends-who-you-ask#comments-area)\n\nYou can save this article by registering for free [here](https:\/\/financialpost.com\/register\/). Or [sign-in](https:\/\/financialpost.com\/sign-in\/) if you have an account.\n\n![The New York Stock Exchange at Wall Street in New York City, U.S.](https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/01\/no0117wallst.jpg?quality=90&strip=all&w=288&h=216&sig=Wyce26eQt1IwjJ5KY0W39A)\n\nThe New York Stock Exchange at Wall Street in New York City, U.S. Photo by ANGELA WEISS\/AFP via Getty Images files\n\nArticle content\n\nTo say that U.S. stocks found a sweet spot the past few years would be an understatement.\n\n![Financial Post](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/identity\/logo-identity-fp.svg)\n\nTHIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY\n\nSubscribe now to read the latest news in your city and across Canada.\n\n- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.\n- Daily content from Financial Times, the world's leading global business publication.\n- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.\n- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.\n- Daily puzzles, including the New York Times Crossword.\n\nSUBSCRIBE TO UNLOCK MORE ARTICLES\n\nSubscribe now to read the latest news in your city and across Canada.\n\n- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.\n- Daily content from Financial Times, the world's leading global business publication.\n- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.\n- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.\n- Daily puzzles, including the New York Times Crossword.\n\nREGISTER \/ SIGN IN TO UNLOCK MORE ARTICLES\n\nCreate an account or sign in to continue with your reading experience.\n\n- Access articles from across Canada with one account.\n- Share your thoughts and join the conversation in the comments.\n- Enjoy additional articles per month.\n- Get email updates from your favourite authors.\n\nTHIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.\n\nCreate an account or sign in to continue with your reading experience.\n\n- Access articles from across Canada with one account\n- Share your thoughts and join the conversation in the comments\n- Enjoy additional articles per month\n- Get email updates from your favourite authors\n\n## Sign In or Create an Account\nor\n\n[View more offers](https:\/\/financialpost.com\/subscribe)\n\nIf you are a Home delivery print subscriber, online access is **included** in your subscription.  [Activate your Online Access Now](https:\/\/financialpost.com\/activate\/)\n\nArticle content\n\n[Falling inflation](https:\/\/financialpost.com\/tag\/inflation\/), [lower interest rates](https:\/\/financialpost.com\/tag\/interest-rates\/), healthy corporate earnings and a strong economy sent stock markets on a two-year run that has defied even the most optimistic forecasts.\n\nArticle content\n\n![Loading...](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/common\/icon-spinner-animated.svg)\n\nWe apologize, but this video has failed to load.\n\nTry refreshing your browser, or  \n[tap here to see other videos from our team](https:\/\/financialpost.com\/video-centre\/ \"Video Centre\").\n\n##### Bond market volatility spells trouble Back to video\n![Close sticky video]()\n\n![Loading...](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/common\/icon-spinner-animated.svg)\n\nWe apologize, but this video has failed to load.\n\nTry refreshing your browser, or  \n[tap here to see other videos from our team](https:\/\/financialpost.com\/video-centre\/ \"Video Centre\").\n\nPause Video\n\nBond market volatility spells trouble\n\nGreg Taylor, chief investment officer at Purpose Investments, talks with Financial Post's Larysa Harapyn about how the bond market will set the tone this year and warns stocks could be \"collateral damage.\"\n\n0 of 7 minutes, 46 secondsVolume 0%\n\nPress shift question mark to access a list of keyboard shortcuts\n\nKeyboard Shortcuts\n\nEnabledDisabled\n\nShortcuts Open\/Close\/ or ?\n\nPlay\/PauseSPACE\n\nIncrease Volume↑\n\nDecrease Volume↓\n\nSeek Forward→\n\nSeek Backward←\n\nCaptions On\/Offc\n\nFullscreen\/Exit Fullscreenf\n\nMute\/Unmutem\n\nDecrease Caption Size\\-\n\nIncrease Caption Size\\+ or =\n\nSeek %0-9\n\nNext Up\n\nWhy are Canadian bond yields surging?\n\n06:21\n\nSubtitle Settings\n\nOff\n\nEnglish(US)\\_v\n\nFont Color\n\nWhite\n\nFont Opacity\n\n100%\n\nFont Size\n\n100%\n\nFont Family\n\nsans-serif\n\nCharacter Edge\n\nNone\n\nEdge Color\n\nBlack\n\nBackground Color\n\nBlack\n\nBackground Opacity\n\n75%\n\nWindow Color\n\nBlack\n\nWindow Opacity\n\n0%\n\nReset\n\nWhite\n\nBlack\n\nRed\n\nGreen\n\nBlue\n\nYellow\n\nMagenta\n\nCyan\n\n100%\n\n75%\n\n50%\n\n25%\n\n200%\n\n175%\n\n150%\n\n125%\n\n100%\n\n75%\n\n50%\n\nArial\n\nCourier\n\nGeorgia\n\nImpact\n\nLucida Console\n\nTahoma\n\nTimes New Roman\n\nTrebuchet MS\n\nVerdana\n\nNone\n\nRaised\n\nDepressed\n\nUniform\n\nDrop Shadow\n\nWhite\n\nBlack\n\nRed\n\nGreen\n\nBlue\n\nYellow\n\nMagenta\n\nCyan\n\nWhite\n\nBlack\n\nRed\n\nGreen\n\nBlue\n\nYellow\n\nMagenta\n\nCyan\n\n100%\n\n75%\n\n50%\n\n25%\n\n0%\n\nWhite\n\nBlack\n\nRed\n\nGreen\n\nBlue\n\nYellow\n\nMagenta\n\nCyan\n\n100%\n\n75%\n\n50%\n\n25%\n\n0%\n\nAuto540p\n\n1080p\n\n720p\n\n540p\n\n360p\n\n270p\n\n180p\n\nLive\n\n00:02\n\n07:44\n\n07:46\n\nMore Videos\n\n06:21\n\nWhy are Canadian bond yields surging?\n\n07:05\n\nEarnings season primed for double digit growth\n\n01:28\n\nPsychiatric hospital in Tehran damaged by shrapnel from nearby strike\n\n00:36\n\nUniversity research center in Tehran severely damaged in airstrike\n\n01:19\n\nIran war puts defence stocks back in the spotlight\n\n01:22\n\nMenopause products are having a hot minute. Doctors urge women to be wary of the marketing s...\n\n00:41\n\nHong Kong and other Asian markets retreat on concerns of fragile Middle East ceasefire\n\n00:52\n\nAsia market jumps up on news of US and Iran agreeing to 2-week ceasefire\n\n01:00\n\nExplosion prompts closure of bridge over Panama Canal as authorities assess damage\n\n00:58\n\nBuilding damaged in town of Ramat Gan after Iran fires missiles towards Israel\n\nClose\n\nArticle content\n\nThe S\\&P 500 gained 24 per cent in 2023 and 23 per cent in 2024, owing in large part to the strength of the so-called [“Magnificent Seven” stocks](https:\/\/financialpost.com\/tag\/magnificent-seven-stocks\/) — Apple Inc., Microsoft Corp., Amazon.com, Inc., Alphabet Inc., Meta Platforms Inc., NVIDIA Corp. and Tesla Inc. — which accounted for 53 per cent of the S\\&P’s returns last year and now make up more than one-third of the S\\&P’s total market capitalization.\n\nArticle content\n\nArticle content\n\nBut the unexpected rise, now-lofty valuations and an enthusiasm for [artificial intelligence](https:\/\/financialpost.com\/tag\/artificial-intelligence\/) that is drawing parallels to the dot-com era have some questioning whether markets are in a bubble.\n\nArticle content\n\n![FP Investor Banner](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/newsletters\/icon-fp-investor.svg)\n\nInvestor\n\nCanada's best source for investing news, analysis and insight.\n\nBy signing up you consent to receive the above newsletter from Postmedia Network Inc.\n\nThanks for signing up\\!\n\nA welcome email is on its way. If you don't see it, please check your junk folder.\n\nThe next issue of Investor will soon be in your inbox.\n\nWe encountered an issue signing you up. Please try again\n\nInterested in more newsletters? [Browse here.](https:\/\/financialpost.com\/newsletters)\n\nArticle content\n\nThat the last time the S\\&P 500 posted back-to-back 20 per cent gains was 1998 is only fuelling those concerns.\n\nArticle content\n\n[David Rosenberg](https:\/\/financialpost.com\/tag\/david-rosenberg\/), founder and president of Rosenberg Research, is one who believes analysts are underestimating the “tremendous confidence in the future” driving the 2023-24 rally.\n\nArticle content\n\nRosenberg says AI has hit an inflection point in the technology curve where investors typically lengthen their time horizons, as they did during the internet mania of the 1990s. Eventually, the dot-com bubble burst — but only after four years of incredible growth.\n\nArticle content\n\n“Even knowing about the mid to late 1990s, we don’t know where we are right now in this cycle,” Rosenberg said. “Is it ’96 or ’97, or is it ’98 or ’99?”\n\nArticle content\n\n## **Signs of a dot-com bubble ‘déjà vu’**\n\nArticle content\n\nLikewise, Bill Smead, founder and chief investment officer at Smead Capital Management, sees warning signs in the exuberance.\n\nArticle content\n\nIn a Dec. 10 note to clients, Smead said investors were facing a “déjà vu moment” with bullish sentiment prevailing, record-high equity ownership by U.S. households and speculative investments such as Bitcoin hitting new highs.\n\nArticle content\n\nArticle content\n\n“Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears,” he said.\n\nArticle content\n\nRead More\n\n1. [![A trader works at his desk on the floor of the New York Stock Exchange (NYSE) during the first session of the new year on January 2, 2025, in New York City. (Photo by TIMOTHY A. CLARY \/ AFP) (Photo by TIMOTHY A. CLARY\/AFP via Getty Images)](https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/01\/no0115stocks.jpg?h=96&strip=all&quality=5&sig=JuQiRJdPipEZw04IIrdBpw) 5 new tactics to try if your stock market moves no longer work](https:\/\/financialpost.com\/investing\/5-new-tactics-stock-market-moves-dont-work)\n2. [![A check in monitor in the Nvidia Corp. office in Austin, Texas.](https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/01\/no0110nvidia.jpg?h=96&strip=all&quality=5&sig=CbAKsHbSsyLVsr6ldhgZZg) Investors are betting on decades more of skyhigh profits](https:\/\/financialpost.com\/investing\/investors-betting-decades-more-skyhigh-profits)\n3. Advertisement 1\n   \n   Story continues below\n   \n   This advertisement has not loaded yet, but your article continues below.\n\nArticle content\n\nFew dispute that AI will be transformative — it’s more a question of the market cycle, in which hype around new investments spirals into what former Federal Reserve Board chairman Alan Greenspan famously called “irrational exuberance” as investors drive stock prices far beyond what their fundamentals support, ending in a moderate correction or rapid freefall.\n\nArticle content\n\n“There’s usually a grain of truth that underlies every mania and bubble. It just gets taken too far,” Howard Marks, co-chairman of Oaktree Capital Management, wrote in a note to investors on Jan. 2. “It’s clear that the internet absolutely did change the world — in fact, we can’t imagine a world without it. But the vast majority of internet and e-commerce companies that soared in the late ’90s bubble ended up worthless.”\n\nArticle content\n\nBut there are differences from the dot-com bubble, which was marked by “indiscriminate bidding” for companies with no viable business plans or path to profitability, such as pet supply website Pets.com or online grocery delivery startup WebVan, said Que Nguyen, a partner at Research Affiliates in Newport Beach, Calif.\n\nAdvertisement 1\n\nThis advertisement has not loaded yet.\n\nTrending\n\n1. [BYD to open 20 car dealerships in Canada this year](https:\/\/financialpost.com\/transportation\/autos\/byd-open-20-car-dealerships-canada-2026)\n   \n   [![The BYD Co. automobile showroom in Coulsdon, U.K. The company is opening some 20 sales locations with partners in Canada this year.](https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/04\/no0408byd.jpg?quality=5&strip=all&w=100&sig=gLefe9x17ColVPx5K_gT6w)](https:\/\/financialpost.com\/transportation\/autos\/byd-open-20-car-dealerships-canada-2026)\n   \n   [Autos](https:\/\/financialpost.com\/category\/transportation\/autos\/)\n2. [Why are Canadian bond yields surging?](https:\/\/financialpost.com\/fp-finance\/why-are-canadian-bond-yields-surging)\n   \n   [![Canada flag Stock market finance business, economy trend graph digital technology.](https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/04\/0410-mg-bonds-2.jpg?quality=5&strip=all&w=100&sig=gyw59NjY7FrciKepqsLRzg)](https:\/\/financialpost.com\/fp-finance\/why-are-canadian-bond-yields-surging)\n   \n   [Finance](https:\/\/financialpost.com\/category\/fp-finance\/)\n3. Advertisement 2\n   \n   Story continues below\n   \n   This advertisement has not loaded yet, but your article continues below.\n4. ['Time to shift that narrative' — RBC to launch \\$1-billion fund to help Canadian businesses grow](https:\/\/financialpost.com\/fp-finance\/banking\/rbc-launch-fund-help-canadian-businesses-grow)\n   \n   [![RBC chief executive Dave McKay, says Canada needs \\$1.8 trillion in capital investment over the next decade to meet its economic potential.](https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/04\/rbc-0409-ph.jpg?quality=5&strip=all&w=100&sig=3RUx_ykuq8hiDFwUA1vz3Q)](https:\/\/financialpost.com\/fp-finance\/banking\/rbc-launch-fund-help-canadian-businesses-grow)\n   \n   [Banking](https:\/\/financialpost.com\/category\/fp-finance\/banking\/)\n5. [How the global energy crisis is shaking Canada from coast to coast — and could leave a lasting legacy](https:\/\/financialpost.com\/feature\/iran-war-energy-crisis-shaking-up-canada)\n   \n   [![The Irving Oil refinery in Saint John.](https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/04\/irving-0408-ph.jpg?quality=5&strip=all&w=100&sig=jOLzt7BejXt1Od7bMFSaJg)](https:\/\/financialpost.com\/feature\/iran-war-energy-crisis-shaking-up-canada)\n   \n   [Oil & Gas](https:\/\/financialpost.com\/category\/commodities\/energy\/oil-gas\/)\n6. [Posthaste: How the U.S. dollar stole the Canadian dollar's petrocurrency thunder](https:\/\/financialpost.com\/news\/canadian-dollar-yields-petrocurrency-status-u-s-dollar)\n   \n   [![Canadian dollar](https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/04\/canadian-dollar-gs0408.jpg?quality=5&strip=all&w=100&sig=VpUZ7S-NbLKe0yG9p52jog)](https:\/\/financialpost.com\/news\/canadian-dollar-yields-petrocurrency-status-u-s-dollar)\n   \n   [News](https:\/\/financialpost.com\/category\/news\/)\n\nAdvertisement 2\n\nAdvertisement\n\nThis advertisement has not loaded yet, but your article continues below.\n\nArticle content\n\n“It didn’t really matter what you said you were doing, as long as you had a dot-com next to it,” she said.\n\nArticle content\n\n> Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears\n> \n> Bill Smead\n\nArticle content\n\nEven profitable companies that are still around today, such as Cisco Systems, Inc., got swept up in the hype as “the multiple kept ratcheting up faster than the earnings could catch up,” Nguyen said.\n\nArticle content\n\nCisco’s stock price peaked at \\$80 in March 2000 before declining 89 per cent by October 2002. Cisco’s fortunes have since rebounded, but its stock price has never fully returned to its dot-com-era high.\n\nArticle content\n\nNguyen says a common parallel is chipmaker Nvidia, a poster child for the AI revolution. As of Jan. 16, Nvidia’s stock price has risen 833 per cent since the beginning of January 2023. Nvidia contributed more than 22 per cent to the S\\&P 500’s overall return in 2024, more than any other stock. The difference with Nvidia, Nguyen says, is that investors are taking a wait-and-see approach to justify their expectations based on Nvidia’s revenue and earnings.\n\nArticle content\n\n“They’re not necessarily ratcheting up the multiples ahead of the earnings the way they were doing in the tech bubble, (which) tells me that it’s optimism but it’s not unbridled euphoria, which is what you get in a bubble,” she said.\n\nArticle content\n\nArticle content\n\nIt also depends on your investing philosophy. Barry Schwartz, executive vice-president and chief investment officer at Baskin Wealth Management, says people who are calling it a bubble are likely dividend or value investors who don’t invest in tech stocks in the first place.\n\nArticle content\n\n“My argument is you’re not paying attention to what matters today. You don’t understand those business models,” he said. “You can’t say Google is expensive or Meta is expensive at 25 times earnings and compare it to your Canadian bank at 12 times earnings. There’s no mean reversion to these companies; they’re just growing and taking market share.”\n\nArticle content\n\n## **Betting on (or against) ‘American exceptionalism’**\n\nArticle content\n\nThe unprecedented growth in big tech stocks means the U.S. now dominates global markets. U.S.-listed companies made up more than half of the world’s stock market value in 2024 and 70 per cent of the MSCI World Index, which tracks 1,500 mid and large-cap companies in 23 countries.\n\nArticle content\n\nSome call it “American exceptionalism,” the idea that the U.S. has a unique fusion of factors — including a buoyant economy, strong dollar, educational opportunities, infrastructure, the world’s largest consumer market and many of the world’s most profitable companies — that make it inherently powerful.\n\nArticle content\n\nArticle content\n\n“America is still a magnet for all sorts of people seeking freedom, people seeking economic opportunities, people seeking education opportunities, people seeking jobs, people seeking to start businesses, to innovate. I think that is something that is really unique about the United States,” said Nguyen. “There are other parts of the world that have that feature, but the United States is the largest country with that feature.”\n\nArticle content\n\nTo others, the idea of American exceptionalism is simply attaching a narrative to price action — a “camouflage” for government deficit spending propping up growth, said Rosenberg.\n\nArticle content\n\n“If we are going to define exceptionalism as reckless fiscal policy, sure, let’s call it exceptionalism,” he said. “But that’s what makes America different, is that we are in the midst of an ongoing massive deficit-financed fiscal stimulus, whether it’s spending on one side of the income statement or tax subsidies on the other side of the income statement.”\n\nArticle content\n\nThe idea that the U.S. is inherently positioned for perpetual superiority also doesn’t sit well with everyone in other parts of the world.\n\nArticle content\n\nIn a Financial Times column, writer and economist Tej Parikh says America’s strengths mask some of its unflattering economic realities.\n\nArticle content\n\n“The fanfare over U.S. capitalism is not unfounded. But it can obscure arguments that counter the idea of U.S. economic superiority,” he wrote, citing high household spending on healthcare with worse health outcomes, high levels of credit card debt, economic growth supported by government spending and the “privileged ability” to run deficits and the fact that lower income earners are squeezed to afford necessities while high earners own the majority of equity investments.\n\nArticle content\n\nWhile the U.S. has scalability, liquidity and tech innovation on its side, Parikh argued in another column that there’s still opportunities for investors among European heavyweights such as LVMH Moet Hennessy Louis Vuitton SE, Nestlé S.A., Novo Nordisk A\/S and ASML Holding NV.\n\nArticle content\n\n“They are established, broad businesses with global exposure, low volatility and strong earnings — and some are now undervalued,” Parikh wrote, adding that Europe also has several “competitive” companies across different industries such as Glencore plc, Siemens Energy AG, Airbus SE, Adidas AG, Carl Zeiss Meditec AG and SAP SE.\n\nArticle content\n\nArticle content\n\n“The stellar returns of the U.S. stock market do not mean that European companies are no good,” Parikh wrote. “Rather, investors are willing to pay a premium to get exposure to AI (and Trump 2.0) — one that is looking harder to justify.”\n\nArticle content\n\n## **Looking into 2025**\n\nArticle content\n\nIn 2025, Wall Street analysts are forecasting the S\\&P 500 to gain anywhere from 5 per cent to 20 per cent, with most analysts predicting between 10 per cent and 15 per cent — but they are keeping an eye on how an “unusually concentrated” market will affect returns over the long term, Goldman Sachs chief U.S. equity strategist David Kostin said in a November Goldman Sachs Research newsletter.\n\nArticle content\n\n“Investors should be concerned about market concentration over the longer term, say 10 years, because the historical record suggests that a meaningful relationship exists between market concentration and forward returns, with high concentration associated with lower returns over longer horizons,” he said.\n\nArticle content\n\nAs the Magnificent Seven stocks continue their run in 2025, analysts are also keeping an eye on whether companies’ earnings can deliver on investors’ high expectations and sustain growth if strong performance is already priced in.\n\nArticle content\n\nArticle content\n\n“It shouldn’t come as a surprise that the return on an investment is significantly a function of the price paid for it,” Marks wrote in his note. “For that reason, investors clearly shouldn’t be indifferent to today’s market valuation.”\n\nArticle content\n\nYields on 10-year Treasury bonds are also creeping up to 5 per cent, posing risk-free competition to the expensive equity market and making investors anxious that higher borrowing costs will dampen corporate profits.\n\nArticle content\n\nBut after two years of growth beyond wildest expectations, Rosenberg says beauty is in the eye of the beholder when it comes to the animal spirits driving the market rally.\n\nArticle content\n\n“There’s people that believe that AI is going to produce 30 per cent of its growth over the next five years,” he said. “So, when I tell some people, ‘Well, 20 per cent is priced in,’ they say, ‘Oh my God, the market’s cheap then.’”\n\nArticle content\n\n*• Email: [jswitzer@postmedia.com](mailto:jswitzer@postmedia.com)*\n\nArticle content\n\n***Bookmark our website and support our journalism:** Don’t miss the business news you need to know — add [financialpost.com](https:\/\/financialpost.com\/) to your bookmarks and sign up for our newsletters [here](https:\/\/financialpost.com\/newsletters\/).*\n\nArticle content\n\nShare this article in your social network\n\n- [![Share via 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[Home](https:\/\/financialpost.com\/)\n2. [Investor](https:\/\/financialpost.com\/category\/investing\/)\n\n## Is the U.S. stock market in a bubble? It depends on who you ask\nSome say ‘American exceptionalism’ justifies elevated valuations; other fear the signs of dot-com ‘deja vu’ are being ignored\n\nLast updated Mar 31, 2025\n\nYou can save this article by registering for free [here](https:\/\/financialpost.com\/register\/). Or [sign-in](https:\/\/financialpost.com\/sign-in\/) if you have an account.\n\n![The New York Stock Exchange at Wall Street in New York City, U.S.](https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/01\/no0117wallst.jpg?quality=90&strip=all&w=288&h=216&sig=Wyce26eQt1IwjJ5KY0W39A)\n\nThe New York Stock Exchange at Wall Street in New York City, U.S. Photo by ANGELA WEISS\/AFP via Getty Images files\n\nTo say that U.S. stocks found a sweet spot the past few years would be an understatement.\n\n![Financial Post](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/identity\/logo-identity-fp.svg)\n\nSubscribe now to read the latest news in your city and across Canada.\n\n- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.\n- Daily content from Financial Times, the world's leading global business publication.\n- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.\n- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.\n- Daily puzzles, including the New York Times Crossword.\n\nSubscribe now to read the latest news in your city and across Canada.\n\n- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.\n- Daily content from Financial Times, the world's leading global business publication.\n- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.\n- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.\n- Daily puzzles, including the New York Times Crossword.\n\nCreate an account or sign in to continue with your reading experience.\n\n- Access articles from across Canada with one account.\n- Share your thoughts and join the conversation in the comments.\n- Enjoy additional articles per month.\n- Get email updates from your favourite authors.\n\nCreate an account or sign in to continue with your reading experience.\n\n- Access articles from across Canada with one account\n- Share your thoughts and join the conversation in the comments\n- Enjoy additional articles per month\n- Get email updates from your favourite authors\n\n## Sign In or Create an Account\nor\n\n[Falling inflation](https:\/\/financialpost.com\/tag\/inflation\/), [lower interest rates](https:\/\/financialpost.com\/tag\/interest-rates\/), healthy corporate earnings and a strong economy sent stock markets on a two-year run that has defied even the most optimistic forecasts.\n\nThe S\\&P 500 gained 24 per cent in 2023 and 23 per cent in 2024, owing in large part to the strength of the so-called [“Magnificent Seven” stocks](https:\/\/financialpost.com\/tag\/magnificent-seven-stocks\/) — Apple Inc., Microsoft Corp., Amazon.com, Inc., Alphabet Inc., Meta Platforms Inc., NVIDIA Corp. and Tesla Inc. — which accounted for 53 per cent of the S\\&P’s returns last year and now make up more than one-third of the S\\&P’s total market capitalization.\n\nBut the unexpected rise, now-lofty valuations and an enthusiasm for [artificial intelligence](https:\/\/financialpost.com\/tag\/artificial-intelligence\/) that is drawing parallels to the dot-com era have some questioning whether markets are in a bubble.\n\n![FP Investor Banner](https:\/\/dcs-static.gprod.postmedia.digital\/20.9.1\/websites\/images\/newsletters\/icon-fp-investor.svg)\n\nCanada's best source for investing news, analysis and insight.\n\nBy signing up you consent to receive the above newsletter from Postmedia Network Inc.\n\nA welcome email is on its way. If you don't see it, please check your junk folder.\n\nThe next issue of Investor will soon be in your inbox.\n\nWe encountered an issue signing you up. Please try again\n\nThat the last time the S\\&P 500 posted back-to-back 20 per cent gains was 1998 is only fuelling those concerns.\n\n[David Rosenberg](https:\/\/financialpost.com\/tag\/david-rosenberg\/), founder and president of Rosenberg Research, is one who believes analysts are underestimating the “tremendous confidence in the future” driving the 2023-24 rally.\n\nRosenberg says AI has hit an inflection point in the technology curve where investors typically lengthen their time horizons, as they did during the internet mania of the 1990s. Eventually, the dot-com bubble burst — but only after four years of incredible growth.\n\n“Even knowing about the mid to late 1990s, we don’t know where we are right now in this cycle,” Rosenberg said. “Is it ’96 or ’97, or is it ’98 or ’99?”\n\nLikewise, Bill Smead, founder and chief investment officer at Smead Capital Management, sees warning signs in the exuberance.\n\nIn a Dec. 10 note to clients, Smead said investors were facing a “déjà vu moment” with bullish sentiment prevailing, record-high equity ownership by U.S. households and speculative investments such as Bitcoin hitting new highs.\n\n“Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears,” he said.\n\nFew dispute that AI will be transformative — it’s more a question of the market cycle, in which hype around new investments spirals into what former Federal Reserve Board chairman Alan Greenspan famously called “irrational exuberance” as investors drive stock prices far beyond what their fundamentals support, ending in a moderate correction or rapid freefall.\n\n“There’s usually a grain of truth that underlies every mania and bubble. It just gets taken too far,” Howard Marks, co-chairman of Oaktree Capital Management, wrote in a note to investors on Jan. 2. “It’s clear that the internet absolutely did change the world — in fact, we can’t imagine a world without it. But the vast majority of internet and e-commerce companies that soared in the late ’90s bubble ended up worthless.”\n\nBut there are differences from the dot-com bubble, which was marked by “indiscriminate bidding” for companies with no viable business plans or path to profitability, such as pet supply website Pets.com or online grocery delivery startup WebVan, said Que Nguyen, a partner at Research Affiliates in Newport Beach, Calif.\n\n“It didn’t really matter what you said you were doing, as long as you had a dot-com next to it,” she said.\n\n> Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears\n\nEven profitable companies that are still around today, such as Cisco Systems, Inc., got swept up in the hype as “the multiple kept ratcheting up faster than the earnings could catch up,” Nguyen said.\n\nCisco’s stock price peaked at \\$80 in March 2000 before declining 89 per cent by October 2002. Cisco’s fortunes have since rebounded, but its stock price has never fully returned to its dot-com-era high.\n\nNguyen says a common parallel is chipmaker Nvidia, a poster child for the AI revolution. As of Jan. 16, Nvidia’s stock price has risen 833 per cent since the beginning of January 2023. Nvidia contributed more than 22 per cent to the S\\&P 500’s overall return in 2024, more than any other stock. The difference with Nvidia, Nguyen says, is that investors are taking a wait-and-see approach to justify their expectations based on Nvidia’s revenue and earnings.\n\n“They’re not necessarily ratcheting up the multiples ahead of the earnings the way they were doing in the tech bubble, (which) tells me that it’s optimism but it’s not unbridled euphoria, which is what you get in a bubble,” she said.\n\nIt also depends on your investing philosophy. Barry Schwartz, executive vice-president and chief investment officer at Baskin Wealth Management, says people who are calling it a bubble are likely dividend or value investors who don’t invest in tech stocks in the first place.\n\n“My argument is you’re not paying attention to what matters today. You don’t understand those business models,” he said. “You can’t say Google is expensive or Meta is expensive at 25 times earnings and compare it to your Canadian bank at 12 times earnings. There’s no mean reversion to these companies; they’re just growing and taking market share.”\n\nThe unprecedented growth in big tech stocks means the U.S. now dominates global markets. U.S.-listed companies made up more than half of the world’s stock market value in 2024 and 70 per cent of the MSCI World Index, which tracks 1,500 mid and large-cap companies in 23 countries.\n\nSome call it “American exceptionalism,” the idea that the U.S. has a unique fusion of factors — including a buoyant economy, strong dollar, educational opportunities, infrastructure, the world’s largest consumer market and many of the world’s most profitable companies — that make it inherently powerful.\n\n“America is still a magnet for all sorts of people seeking freedom, people seeking economic opportunities, people seeking education opportunities, people seeking jobs, people seeking to start businesses, to innovate. I think that is something that is really unique about the United States,” said Nguyen. “There are other parts of the world that have that feature, but the United States is the largest country with that feature.”\n\nTo others, the idea of American exceptionalism is simply attaching a narrative to price action — a “camouflage” for government deficit spending propping up growth, said Rosenberg.\n\n“If we are going to define exceptionalism as reckless fiscal policy, sure, let’s call it exceptionalism,” he said. “But that’s what makes America different, is that we are in the midst of an ongoing massive deficit-financed fiscal stimulus, whether it’s spending on one side of the income statement or tax subsidies on the other side of the income statement.”\n\nThe idea that the U.S. is inherently positioned for perpetual superiority also doesn’t sit well with everyone in other parts of the world.\n\nIn a Financial Times column, writer and economist Tej Parikh says America’s strengths mask some of its unflattering economic realities.\n\n“The fanfare over U.S. capitalism is not unfounded. But it can obscure arguments that counter the idea of U.S. economic superiority,” he wrote, citing high household spending on healthcare with worse health outcomes, high levels of credit card debt, economic growth supported by government spending and the “privileged ability” to run deficits and the fact that lower income earners are squeezed to afford necessities while high earners own the majority of equity investments.\n\nWhile the U.S. has scalability, liquidity and tech innovation on its side, Parikh argued in another column that there’s still opportunities for investors among European heavyweights such as LVMH Moet Hennessy Louis Vuitton SE, Nestlé S.A., Novo Nordisk A\/S and ASML Holding NV.\n\n“They are established, broad businesses with global exposure, low volatility and strong earnings — and some are now undervalued,” Parikh wrote, adding that Europe also has several “competitive” companies across different industries such as Glencore plc, Siemens Energy AG, Airbus SE, Adidas AG, Carl Zeiss Meditec AG and SAP SE.\n\n“The stellar returns of the U.S. stock market do not mean that European companies are no good,” Parikh wrote. “Rather, investors are willing to pay a premium to get exposure to AI (and Trump 2.0) — one that is looking harder to justify.”\n\nIn 2025, Wall Street analysts are forecasting the S\\&P 500 to gain anywhere from 5 per cent to 20 per cent, with most analysts predicting between 10 per cent and 15 per cent — but they are keeping an eye on how an “unusually concentrated” market will affect returns over the long term, Goldman Sachs chief U.S. equity strategist David Kostin said in a November Goldman Sachs Research newsletter.\n\n“Investors should be concerned about market concentration over the longer term, say 10 years, because the historical record suggests that a meaningful relationship exists between market concentration and forward returns, with high concentration associated with lower returns over longer horizons,” he said.\n\nAs the Magnificent Seven stocks continue their run in 2025, analysts are also keeping an eye on whether companies’ earnings can deliver on investors’ high expectations and sustain growth if strong performance is already priced in.\n\n“It shouldn’t come as a surprise that the return on an investment is significantly a function of the price paid for it,” Marks wrote in his note. “For that reason, investors clearly shouldn’t be indifferent to today’s market valuation.”\n\nYields on 10-year Treasury bonds are also creeping up to 5 per cent, posing risk-free competition to the expensive equity market and making investors anxious that higher borrowing costs will dampen corporate profits.\n\nBut after two years of growth beyond wildest expectations, Rosenberg says beauty is in the eye of the beholder when it comes to the animal spirits driving the market rally.\n\n“There’s people that believe that AI is going to produce 30 per cent of its growth over the next five years,” he said. “So, when I tell some people, ‘Well, 20 per cent is priced in,’ they say, ‘Oh my God, the market’s cheap then.’”\n\n***Bookmark our website and support our journalism:** Don’t miss the business news you need to know — add [financialpost.com](https:\/\/financialpost.com\/) to your bookmarks and sign up for our newsletters [here](https:\/\/financialpost.com\/newsletters\/).*\n\nJoin the Conversation\n\nThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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By continuing to use our site, you agree to our [Terms of Use](https:\/\/www.postmedia.com\/terms-and-conditions\/ \"Terms of Use (Leaving Financial Post)\") and [Privacy Policy](https:\/\/financialpost.com\/privacy-statement\/en\/).\n\n![iiq\\_pixel](https:\/\/sync.intentiq.com\/profiles_engine\/ProfilesEngineServlet?at=20&mi=10&secure=1&dpi=1589173297&iiqidtype=2&iiqpcid=243a988f-88d4-d8e4-f1d1-32f4445fcc27&iiqpciddate=1775815537738&tsrnd=815_1775815537743&jsver=6.122&cz=0%3A12140%2C1%3A1024%2C2%3A1%2C3%3A600%2C4%3A800%2C5%3Aen-US&dw=800&dh=600&dpr=1&lan=en-US&testPercentage=-1&testGroup=U&uh=%7B%220%22%3A%22%22%2C%221%22%3A%22%3F0%22%2C%227%22%3A%22%3F0%22%2C%228%22%3A%22%22%7D&vrref=https%3A%2F%2Ffinancialpost.com&gpc=undefined&gdpr=0)","meta_canonical":null,"ml_categories_json":"{\"\/Finance\":997,\"\/Finance\/Investing\":994,\"\/Finance\/Investing\/Stocks_and_Bonds\":987}","ml_types_json":"{\"\/Article\":999,\"\/Article\/Opinion_Piece\":813}","ml_intent_types_json":"{\"Informational\":999}","meta_language":"en","attrs_author":"Jane Switzer","attrs_publish_time":0,"attrs_original_publish_time":1737284689,"attrs_is_republished":0,"attrs_nr_words":"3448","attrs_boilerpipe_nr_words":"2228","body_ext_links_number":74,"body_int_links_number":80,"meta_nofollow":0,"meta_noarchive":1,"props_was_rendered":1,"src_redirect":"","download_time_msec":47,"download_ttfb_msec":41,"download_size":83424}

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It depends on who you ask Some say ‘American exceptionalism’ justifies elevated valuations; other fear the signs of dot-com ‘deja vu’ are being ignored Last updated Mar 31, 2025 You can save this article by registering for free here . Or sign-in if you have an account. The New York Stock Exchange at Wall Street in New York City, U.S. Photo by ANGELA WEISS/AFP via Getty Images files To say that U.S. stocks found a sweet spot the past few years would be an understatement. Subscribe now to read the latest news in your city and across Canada. Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others. Daily content from Financial Times, the world's leading global business publication. Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account. National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on. Daily puzzles, including the New York Times Crossword. Subscribe now to read the latest news in your city and across Canada. Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others. Daily content from Financial Times, the world's leading global business publication. Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account. National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on. Daily puzzles, including the New York Times Crossword. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Sign In or Create an Account or Falling inflation , lower interest rates , healthy corporate earnings and a strong economy sent stock markets on a two-year run that has defied even the most optimistic forecasts. The S&P 500 gained 24 per cent in 2023 and 23 per cent in 2024, owing in large part to the strength of the so-called “Magnificent Seven” stocks — Apple Inc., Microsoft Corp., Amazon.com, Inc., Alphabet Inc., Meta Platforms Inc., NVIDIA Corp. and Tesla Inc. — which accounted for 53 per cent of the S&P’s returns last year and now make up more than one-third of the S&P’s total market capitalization. But the unexpected rise, now-lofty valuations and an enthusiasm for artificial intelligence that is drawing parallels to the dot-com era have some questioning whether markets are in a bubble. Canada's best source for investing news, analysis and insight. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Investor will soon be in your inbox. We encountered an issue signing you up. Please try again That the last time the S&P 500 posted back-to-back 20 per cent gains was 1998 is only fuelling those concerns. David Rosenberg , founder and president of Rosenberg Research, is one who believes analysts are underestimating the “tremendous confidence in the future” driving the 2023-24 rally. Rosenberg says AI has hit an inflection point in the technology curve where investors typically lengthen their time horizons, as they did during the internet mania of the 1990s. Eventually, the dot-com bubble burst — but only after four years of incredible growth. “Even knowing about the mid to late 1990s, we don’t know where we are right now in this cycle,” Rosenberg said. “Is it ’96 or ’97, or is it ’98 or ’99?” Likewise, Bill Smead, founder and chief investment officer at Smead Capital Management, sees warning signs in the exuberance. In a Dec. 10 note to clients, Smead said investors were facing a “déjà vu moment” with bullish sentiment prevailing, record-high equity ownership by U.S. households and speculative investments such as Bitcoin hitting new highs. “Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears,” he said. Few dispute that AI will be transformative — it’s more a question of the market cycle, in which hype around new investments spirals into what former Federal Reserve Board chairman Alan Greenspan famously called “irrational exuberance” as investors drive stock prices far beyond what their fundamentals support, ending in a moderate correction or rapid freefall. “There’s usually a grain of truth that underlies every mania and bubble. It just gets taken too far,” Howard Marks, co-chairman of Oaktree Capital Management, wrote in a note to investors on Jan. 2. “It’s clear that the internet absolutely did change the world — in fact, we can’t imagine a world without it. But the vast majority of internet and e-commerce companies that soared in the late ’90s bubble ended up worthless.” But there are differences from the dot-com bubble, which was marked by “indiscriminate bidding” for companies with no viable business plans or path to profitability, such as pet supply website Pets.com or online grocery delivery startup WebVan, said Que Nguyen, a partner at Research Affiliates in Newport Beach, Calif. “It didn’t really matter what you said you were doing, as long as you had a dot-com next to it,” she said. Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears Even profitable companies that are still around today, such as Cisco Systems, Inc., got swept up in the hype as “the multiple kept ratcheting up faster than the earnings could catch up,” Nguyen said. Cisco’s stock price peaked at $80 in March 2000 before declining 89 per cent by October 2002. Cisco’s fortunes have since rebounded, but its stock price has never fully returned to its dot-com-era high. Nguyen says a common parallel is chipmaker Nvidia, a poster child for the AI revolution. As of Jan. 16, Nvidia’s stock price has risen 833 per cent since the beginning of January 2023. Nvidia contributed more than 22 per cent to the S&P 500’s overall return in 2024, more than any other stock. The difference with Nvidia, Nguyen says, is that investors are taking a wait-and-see approach to justify their expectations based on Nvidia’s revenue and earnings. “They’re not necessarily ratcheting up the multiples ahead of the earnings the way they were doing in the tech bubble, (which) tells me that it’s optimism but it’s not unbridled euphoria, which is what you get in a bubble,” she said. It also depends on your investing philosophy. Barry Schwartz, executive vice-president and chief investment officer at Baskin Wealth Management, says people who are calling it a bubble are likely dividend or value investors who don’t invest in tech stocks in the first place. “My argument is you’re not paying attention to what matters today. You don’t understand those business models,” he said. “You can’t say Google is expensive or Meta is expensive at 25 times earnings and compare it to your Canadian bank at 12 times earnings. There’s no mean reversion to these companies; they’re just growing and taking market share.” The unprecedented growth in big tech stocks means the U.S. now dominates global markets. U.S.-listed companies made up more than half of the world’s stock market value in 2024 and 70 per cent of the MSCI World Index, which tracks 1,500 mid and large-cap companies in 23 countries. Some call it “American exceptionalism,” the idea that the U.S. has a unique fusion of factors — including a buoyant economy, strong dollar, educational opportunities, infrastructure, the world’s largest consumer market and many of the world’s most profitable companies — that make it inherently powerful. “America is still a magnet for all sorts of people seeking freedom, people seeking economic opportunities, people seeking education opportunities, people seeking jobs, people seeking to start businesses, to innovate. I think that is something that is really unique about the United States,” said Nguyen. “There are other parts of the world that have that feature, but the United States is the largest country with that feature.” To others, the idea of American exceptionalism is simply attaching a narrative to price action — a “camouflage” for government deficit spending propping up growth, said Rosenberg. “If we are going to define exceptionalism as reckless fiscal policy, sure, let’s call it exceptionalism,” he said. “But that’s what makes America different, is that we are in the midst of an ongoing massive deficit-financed fiscal stimulus, whether it’s spending on one side of the income statement or tax subsidies on the other side of the income statement.” The idea that the U.S. is inherently positioned for perpetual superiority also doesn’t sit well with everyone in other parts of the world. In a Financial Times column, writer and economist Tej Parikh says America’s strengths mask some of its unflattering economic realities. “The fanfare over U.S. capitalism is not unfounded. But it can obscure arguments that counter the idea of U.S. economic superiority,” he wrote, citing high household spending on healthcare with worse health outcomes, high levels of credit card debt, economic growth supported by government spending and the “privileged ability” to run deficits and the fact that lower income earners are squeezed to afford necessities while high earners own the majority of equity investments. While the U.S. has scalability, liquidity and tech innovation on its side, Parikh argued in another column that there’s still opportunities for investors among European heavyweights such as LVMH Moet Hennessy Louis Vuitton SE, Nestlé S.A., Novo Nordisk A/S and ASML Holding NV. “They are established, broad businesses with global exposure, low volatility and strong earnings — and some are now undervalued,” Parikh wrote, adding that Europe also has several “competitive” companies across different industries such as Glencore plc, Siemens Energy AG, Airbus SE, Adidas AG, Carl Zeiss Meditec AG and SAP SE. “The stellar returns of the U.S. stock market do not mean that European companies are no good,” Parikh wrote. “Rather, investors are willing to pay a premium to get exposure to AI (and Trump 2.0) — one that is looking harder to justify.” In 2025, Wall Street analysts are forecasting the S&P 500 to gain anywhere from 5 per cent to 20 per cent, with most analysts predicting between 10 per cent and 15 per cent — but they are keeping an eye on how an “unusually concentrated” market will affect returns over the long term, Goldman Sachs chief U.S. equity strategist David Kostin said in a November Goldman Sachs Research newsletter. “Investors should be concerned about market concentration over the longer term, say 10 years, because the historical record suggests that a meaningful relationship exists between market concentration and forward returns, with high concentration associated with lower returns over longer horizons,” he said. As the Magnificent Seven stocks continue their run in 2025, analysts are also keeping an eye on whether companies’ earnings can deliver on investors’ high expectations and sustain growth if strong performance is already priced in. “It shouldn’t come as a surprise that the return on an investment is significantly a function of the price paid for it,” Marks wrote in his note. “For that reason, investors clearly shouldn’t be indifferent to today’s market valuation.” Yields on 10-year Treasury bonds are also creeping up to 5 per cent, posing risk-free competition to the expensive equity market and making investors anxious that higher borrowing costs will dampen corporate profits. But after two years of growth beyond wildest expectations, Rosenberg says beauty is in the eye of the beholder when it comes to the animal spirits driving the market rally. “There’s people that believe that AI is going to produce 30 per cent of its growth over the next five years,” he said. “So, when I tell some people, ‘Well, 20 per cent is priced in,’ they say, ‘Oh my God, the market’s cheap then.’” Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here . Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here . By continuing to use our site, you agree to our Terms of Use and Privacy Policy .

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It depends on who you ask Some say ‘American exceptionalism’ justifies elevated valuations; other fear the signs of dot-com ‘deja vu’ are being ignored Author of the article: By [Jane Switzer](https://financialpost.com/author/jswitzerpostmedia-com/) Published Jan 19, 2025 Last updated Mar 31, 2025 8 minute read [Join the conversation](https://financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask#comments-area) You can save this article by registering for free [here](https://financialpost.com/register/). Or [sign-in](https://financialpost.com/sign-in/) if you have an account. ![The New York Stock Exchange at Wall Street in New York City, U.S.](https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2025/01/no0117wallst.jpg?quality=90&strip=all&w=288&h=216&sig=Wyce26eQt1IwjJ5KY0W39A) The New York Stock Exchange at Wall Street in New York City, U.S. Photo by ANGELA WEISS/AFP via Getty Images files Article content To say that U.S. stocks found a sweet spot the past few years would be an understatement. ![Financial Post](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/identity/logo-identity-fp.svg) THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. - Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others. - Daily content from Financial Times, the world's leading global business publication. - Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account. - National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on. - Daily puzzles, including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. - Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others. - Daily content from Financial Times, the world's leading global business publication. - Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account. - National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on. - Daily puzzles, including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. - Access articles from across Canada with one account. - Share your thoughts and join the conversation in the comments. - Enjoy additional articles per month. - Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. - Access articles from across Canada with one account - Share your thoughts and join the conversation in the comments - Enjoy additional articles per month - Get email updates from your favourite authors ## Sign In or Create an Account or [View more offers](https://financialpost.com/subscribe) If you are a Home delivery print subscriber, online access is **included** in your subscription. [Activate your Online Access Now](https://financialpost.com/activate/) Article content [Falling inflation](https://financialpost.com/tag/inflation/), [lower interest rates](https://financialpost.com/tag/interest-rates/), healthy corporate earnings and a strong economy sent stock markets on a two-year run that has defied even the most optimistic forecasts. Article content ![Loading...](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/common/icon-spinner-animated.svg) We apologize, but this video has failed to load. Try refreshing your browser, or [tap here to see other videos from our team](https://financialpost.com/video-centre/ "Video Centre"). ##### Bond market volatility spells trouble Back to video ![Close sticky video]() ![Loading...](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/common/icon-spinner-animated.svg) We apologize, but this video has failed to load. Try refreshing your browser, or [tap here to see other videos from our team](https://financialpost.com/video-centre/ "Video Centre"). Pause Video Bond market volatility spells trouble Greg Taylor, chief investment officer at Purpose Investments, talks with Financial Post's Larysa Harapyn about how the bond market will set the tone this year and warns stocks could be "collateral damage." 0 of 7 minutes, 46 secondsVolume 0% Press shift question mark to access a list of keyboard shortcuts Keyboard Shortcuts EnabledDisabled Shortcuts Open/Close/ or ? Play/PauseSPACE Increase Volume↑ Decrease Volume↓ Seek Forward→ Seek Backward← Captions On/Offc Fullscreen/Exit Fullscreenf Mute/Unmutem Decrease Caption Size\- Increase Caption Size\+ or = Seek %0-9 Next Up Why are Canadian bond yields surging? 06:21 Subtitle Settings Off English(US)\_v Font Color White Font Opacity 100% Font Size 100% Font Family sans-serif Character Edge None Edge Color Black Background Color Black Background Opacity 75% Window Color Black Window Opacity 0% Reset White Black Red Green Blue Yellow Magenta Cyan 100% 75% 50% 25% 200% 175% 150% 125% 100% 75% 50% Arial Courier Georgia Impact Lucida Console Tahoma Times New Roman Trebuchet MS Verdana None Raised Depressed Uniform Drop Shadow White Black Red Green Blue Yellow Magenta Cyan White Black Red Green Blue Yellow Magenta Cyan 100% 75% 50% 25% 0% White Black Red Green Blue Yellow Magenta Cyan 100% 75% 50% 25% 0% Auto540p 1080p 720p 540p 360p 270p 180p Live 00:02 07:44 07:46 More Videos 06:21 Why are Canadian bond yields surging? 07:05 Earnings season primed for double digit growth 01:28 Psychiatric hospital in Tehran damaged by shrapnel from nearby strike 00:36 University research center in Tehran severely damaged in airstrike 01:19 Iran war puts defence stocks back in the spotlight 01:22 Menopause products are having a hot minute. Doctors urge women to be wary of the marketing s... 00:41 Hong Kong and other Asian markets retreat on concerns of fragile Middle East ceasefire 00:52 Asia market jumps up on news of US and Iran agreeing to 2-week ceasefire 01:00 Explosion prompts closure of bridge over Panama Canal as authorities assess damage 00:58 Building damaged in town of Ramat Gan after Iran fires missiles towards Israel Close Article content The S\&P 500 gained 24 per cent in 2023 and 23 per cent in 2024, owing in large part to the strength of the so-called [“Magnificent Seven” stocks](https://financialpost.com/tag/magnificent-seven-stocks/) — Apple Inc., Microsoft Corp., Amazon.com, Inc., Alphabet Inc., Meta Platforms Inc., NVIDIA Corp. and Tesla Inc. — which accounted for 53 per cent of the S\&P’s returns last year and now make up more than one-third of the S\&P’s total market capitalization. Article content Article content But the unexpected rise, now-lofty valuations and an enthusiasm for [artificial intelligence](https://financialpost.com/tag/artificial-intelligence/) that is drawing parallels to the dot-com era have some questioning whether markets are in a bubble. Article content ![FP Investor Banner](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/newsletters/icon-fp-investor.svg) Investor Canada's best source for investing news, analysis and insight. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Thanks for signing up\! A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Investor will soon be in your inbox. We encountered an issue signing you up. Please try again Interested in more newsletters? [Browse here.](https://financialpost.com/newsletters) Article content That the last time the S\&P 500 posted back-to-back 20 per cent gains was 1998 is only fuelling those concerns. Article content [David Rosenberg](https://financialpost.com/tag/david-rosenberg/), founder and president of Rosenberg Research, is one who believes analysts are underestimating the “tremendous confidence in the future” driving the 2023-24 rally. Article content Rosenberg says AI has hit an inflection point in the technology curve where investors typically lengthen their time horizons, as they did during the internet mania of the 1990s. Eventually, the dot-com bubble burst — but only after four years of incredible growth. Article content “Even knowing about the mid to late 1990s, we don’t know where we are right now in this cycle,” Rosenberg said. “Is it ’96 or ’97, or is it ’98 or ’99?” Article content ## **Signs of a dot-com bubble ‘déjà vu’** Article content Likewise, Bill Smead, founder and chief investment officer at Smead Capital Management, sees warning signs in the exuberance. Article content In a Dec. 10 note to clients, Smead said investors were facing a “déjà vu moment” with bullish sentiment prevailing, record-high equity ownership by U.S. households and speculative investments such as Bitcoin hitting new highs. Article content Article content “Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears,” he said. Article content Read More 1. [![A trader works at his desk on the floor of the New York Stock Exchange (NYSE) during the first session of the new year on January 2, 2025, in New York City. (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images)](https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2025/01/no0115stocks.jpg?h=96&strip=all&quality=5&sig=JuQiRJdPipEZw04IIrdBpw) 5 new tactics to try if your stock market moves no longer work](https://financialpost.com/investing/5-new-tactics-stock-market-moves-dont-work) 2. [![A check in monitor in the Nvidia Corp. office in Austin, Texas.](https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2025/01/no0110nvidia.jpg?h=96&strip=all&quality=5&sig=CbAKsHbSsyLVsr6ldhgZZg) Investors are betting on decades more of skyhigh profits](https://financialpost.com/investing/investors-betting-decades-more-skyhigh-profits) 3. Advertisement 1 Story continues below This advertisement has not loaded yet, but your article continues below. Article content Few dispute that AI will be transformative — it’s more a question of the market cycle, in which hype around new investments spirals into what former Federal Reserve Board chairman Alan Greenspan famously called “irrational exuberance” as investors drive stock prices far beyond what their fundamentals support, ending in a moderate correction or rapid freefall. Article content “There’s usually a grain of truth that underlies every mania and bubble. It just gets taken too far,” Howard Marks, co-chairman of Oaktree Capital Management, wrote in a note to investors on Jan. 2. “It’s clear that the internet absolutely did change the world — in fact, we can’t imagine a world without it. But the vast majority of internet and e-commerce companies that soared in the late ’90s bubble ended up worthless.” Article content But there are differences from the dot-com bubble, which was marked by “indiscriminate bidding” for companies with no viable business plans or path to profitability, such as pet supply website Pets.com or online grocery delivery startup WebVan, said Que Nguyen, a partner at Research Affiliates in Newport Beach, Calif. Advertisement 1 This advertisement has not loaded yet. Trending 1. [BYD to open 20 car dealerships in Canada this year](https://financialpost.com/transportation/autos/byd-open-20-car-dealerships-canada-2026) [![The BYD Co. automobile showroom in Coulsdon, U.K. The company is opening some 20 sales locations with partners in Canada this year.](https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2026/04/no0408byd.jpg?quality=5&strip=all&w=100&sig=gLefe9x17ColVPx5K_gT6w)](https://financialpost.com/transportation/autos/byd-open-20-car-dealerships-canada-2026) [Autos](https://financialpost.com/category/transportation/autos/) 2. [Why are Canadian bond yields surging?](https://financialpost.com/fp-finance/why-are-canadian-bond-yields-surging) [![Canada flag Stock market finance business, economy trend graph digital technology.](https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2026/04/0410-mg-bonds-2.jpg?quality=5&strip=all&w=100&sig=gyw59NjY7FrciKepqsLRzg)](https://financialpost.com/fp-finance/why-are-canadian-bond-yields-surging) [Finance](https://financialpost.com/category/fp-finance/) 3. Advertisement 2 Story continues below This advertisement has not loaded yet, but your article continues below. 4. ['Time to shift that narrative' — RBC to launch \$1-billion fund to help Canadian businesses grow](https://financialpost.com/fp-finance/banking/rbc-launch-fund-help-canadian-businesses-grow) [![RBC chief executive Dave McKay, says Canada needs \$1.8 trillion in capital investment over the next decade to meet its economic potential.](https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2026/04/rbc-0409-ph.jpg?quality=5&strip=all&w=100&sig=3RUx_ykuq8hiDFwUA1vz3Q)](https://financialpost.com/fp-finance/banking/rbc-launch-fund-help-canadian-businesses-grow) [Banking](https://financialpost.com/category/fp-finance/banking/) 5. [How the global energy crisis is shaking Canada from coast to coast — and could leave a lasting legacy](https://financialpost.com/feature/iran-war-energy-crisis-shaking-up-canada) [![The Irving Oil refinery in Saint John.](https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2026/04/irving-0408-ph.jpg?quality=5&strip=all&w=100&sig=jOLzt7BejXt1Od7bMFSaJg)](https://financialpost.com/feature/iran-war-energy-crisis-shaking-up-canada) [Oil & Gas](https://financialpost.com/category/commodities/energy/oil-gas/) 6. [Posthaste: How the U.S. dollar stole the Canadian dollar's petrocurrency thunder](https://financialpost.com/news/canadian-dollar-yields-petrocurrency-status-u-s-dollar) [![Canadian dollar](https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2026/04/canadian-dollar-gs0408.jpg?quality=5&strip=all&w=100&sig=VpUZ7S-NbLKe0yG9p52jog)](https://financialpost.com/news/canadian-dollar-yields-petrocurrency-status-u-s-dollar) [News](https://financialpost.com/category/news/) Advertisement 2 Advertisement This advertisement has not loaded yet, but your article continues below. Article content “It didn’t really matter what you said you were doing, as long as you had a dot-com next to it,” she said. Article content > Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears > > Bill Smead Article content Even profitable companies that are still around today, such as Cisco Systems, Inc., got swept up in the hype as “the multiple kept ratcheting up faster than the earnings could catch up,” Nguyen said. Article content Cisco’s stock price peaked at \$80 in March 2000 before declining 89 per cent by October 2002. Cisco’s fortunes have since rebounded, but its stock price has never fully returned to its dot-com-era high. Article content Nguyen says a common parallel is chipmaker Nvidia, a poster child for the AI revolution. As of Jan. 16, Nvidia’s stock price has risen 833 per cent since the beginning of January 2023. Nvidia contributed more than 22 per cent to the S\&P 500’s overall return in 2024, more than any other stock. The difference with Nvidia, Nguyen says, is that investors are taking a wait-and-see approach to justify their expectations based on Nvidia’s revenue and earnings. Article content “They’re not necessarily ratcheting up the multiples ahead of the earnings the way they were doing in the tech bubble, (which) tells me that it’s optimism but it’s not unbridled euphoria, which is what you get in a bubble,” she said. Article content Article content It also depends on your investing philosophy. Barry Schwartz, executive vice-president and chief investment officer at Baskin Wealth Management, says people who are calling it a bubble are likely dividend or value investors who don’t invest in tech stocks in the first place. Article content “My argument is you’re not paying attention to what matters today. You don’t understand those business models,” he said. “You can’t say Google is expensive or Meta is expensive at 25 times earnings and compare it to your Canadian bank at 12 times earnings. There’s no mean reversion to these companies; they’re just growing and taking market share.” Article content ## **Betting on (or against) ‘American exceptionalism’** Article content The unprecedented growth in big tech stocks means the U.S. now dominates global markets. U.S.-listed companies made up more than half of the world’s stock market value in 2024 and 70 per cent of the MSCI World Index, which tracks 1,500 mid and large-cap companies in 23 countries. Article content Some call it “American exceptionalism,” the idea that the U.S. has a unique fusion of factors — including a buoyant economy, strong dollar, educational opportunities, infrastructure, the world’s largest consumer market and many of the world’s most profitable companies — that make it inherently powerful. Article content Article content “America is still a magnet for all sorts of people seeking freedom, people seeking economic opportunities, people seeking education opportunities, people seeking jobs, people seeking to start businesses, to innovate. I think that is something that is really unique about the United States,” said Nguyen. “There are other parts of the world that have that feature, but the United States is the largest country with that feature.” Article content To others, the idea of American exceptionalism is simply attaching a narrative to price action — a “camouflage” for government deficit spending propping up growth, said Rosenberg. Article content “If we are going to define exceptionalism as reckless fiscal policy, sure, let’s call it exceptionalism,” he said. “But that’s what makes America different, is that we are in the midst of an ongoing massive deficit-financed fiscal stimulus, whether it’s spending on one side of the income statement or tax subsidies on the other side of the income statement.” Article content The idea that the U.S. is inherently positioned for perpetual superiority also doesn’t sit well with everyone in other parts of the world. Article content In a Financial Times column, writer and economist Tej Parikh says America’s strengths mask some of its unflattering economic realities. Article content “The fanfare over U.S. capitalism is not unfounded. But it can obscure arguments that counter the idea of U.S. economic superiority,” he wrote, citing high household spending on healthcare with worse health outcomes, high levels of credit card debt, economic growth supported by government spending and the “privileged ability” to run deficits and the fact that lower income earners are squeezed to afford necessities while high earners own the majority of equity investments. Article content While the U.S. has scalability, liquidity and tech innovation on its side, Parikh argued in another column that there’s still opportunities for investors among European heavyweights such as LVMH Moet Hennessy Louis Vuitton SE, Nestlé S.A., Novo Nordisk A/S and ASML Holding NV. Article content “They are established, broad businesses with global exposure, low volatility and strong earnings — and some are now undervalued,” Parikh wrote, adding that Europe also has several “competitive” companies across different industries such as Glencore plc, Siemens Energy AG, Airbus SE, Adidas AG, Carl Zeiss Meditec AG and SAP SE. Article content Article content “The stellar returns of the U.S. stock market do not mean that European companies are no good,” Parikh wrote. “Rather, investors are willing to pay a premium to get exposure to AI (and Trump 2.0) — one that is looking harder to justify.” Article content ## **Looking into 2025** Article content In 2025, Wall Street analysts are forecasting the S\&P 500 to gain anywhere from 5 per cent to 20 per cent, with most analysts predicting between 10 per cent and 15 per cent — but they are keeping an eye on how an “unusually concentrated” market will affect returns over the long term, Goldman Sachs chief U.S. equity strategist David Kostin said in a November Goldman Sachs Research newsletter. Article content “Investors should be concerned about market concentration over the longer term, say 10 years, because the historical record suggests that a meaningful relationship exists between market concentration and forward returns, with high concentration associated with lower returns over longer horizons,” he said. Article content As the Magnificent Seven stocks continue their run in 2025, analysts are also keeping an eye on whether companies’ earnings can deliver on investors’ high expectations and sustain growth if strong performance is already priced in. Article content Article content “It shouldn’t come as a surprise that the return on an investment is significantly a function of the price paid for it,” Marks wrote in his note. “For that reason, investors clearly shouldn’t be indifferent to today’s market valuation.” Article content Yields on 10-year Treasury bonds are also creeping up to 5 per cent, posing risk-free competition to the expensive equity market and making investors anxious that higher borrowing costs will dampen corporate profits. Article content But after two years of growth beyond wildest expectations, Rosenberg says beauty is in the eye of the beholder when it comes to the animal spirits driving the market rally. Article content “There’s people that believe that AI is going to produce 30 per cent of its growth over the next five years,” he said. “So, when I tell some people, ‘Well, 20 per cent is priced in,’ they say, ‘Oh my God, the market’s cheap then.’” Article content *• Email: [jswitzer@postmedia.com](mailto:jswitzer@postmedia.com)* Article content ***Bookmark our website and support our journalism:** Don’t miss the business news you need to know — add [financialpost.com](https://financialpost.com/) to your bookmarks and sign up for our newsletters [here](https://financialpost.com/newsletters/).* Article content Share this article in your social network - [![Share via email](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-circle-email.svg)](mailto:?Subject=I%20saw%20this%20on%20Financial%20Post&Body=https%3A//financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask) - [![Reddit](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-soc-rdit.svg)](https://www.reddit.com/submit?kind=link&url=https%3A//financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask&title= "Share on Reddit in new tab") - [![X](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-soc-tw.svg)](https://twitter.com/intent/tweet?url=https%3A//financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask&text=Financial%20Post&via= "Share on X in new tab") - [![Share on Linkedin](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-soc-li.svg)](https://www.linkedin.com/sharing/share-offsite/?url=https%3A//financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask "Share on LinkedIn") - ![Open more share options](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-circle-share.svg) ![Close](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/common-icon/icon-close-black.svg) Share this Story : Financial Post - [Copy Link](https://financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask) - [![](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-circle-email.svg) Email](mailto:?Subject=I%20saw%20this%20on%20Financial%20Post&Body=https%3A//financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask "Share via email") - [![](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-soc-tw.svg) X](https://twitter.com/intent/tweet?url=https%3A//financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask&text=Financial%20Post&via= "Share on X in new tab") - [![](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-soc-rdit.svg) Reddit](https://www.reddit.com/submit?kind=link&url=https%3A//financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask&title=Financial%20Post "Share on Reddit in new tab") - [![](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-soc-pin.svg) Pinterest](https://pinterest.com/pin/create/button/?url=https://financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask&media=https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2025/01/no0117wallst.jpg "Share on Pinterest in new tab") - [![](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-soc-li.svg) LinkedIn](https://www.linkedin.com/sharing/share-offsite/?url=https://financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask "Share on LinkedIn in new tab") - [![](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/share-icons/icon-soc-tblr.svg) Tumblr](https://www.tumblr.com/widgets/share/tool?canonicalUrl=https://financialpost.com/investing/us-stock-market-bubble-depends-who-you-ask&title=Financial%20Post "Share on Tumblr in new tab") Comments You must be logged in to join the discussion or read more comments. 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[Home](https://financialpost.com/) 2. [Investor](https://financialpost.com/category/investing/) ## Is the U.S. stock market in a bubble? It depends on who you ask Some say ‘American exceptionalism’ justifies elevated valuations; other fear the signs of dot-com ‘deja vu’ are being ignored Last updated Mar 31, 2025 You can save this article by registering for free [here](https://financialpost.com/register/). Or [sign-in](https://financialpost.com/sign-in/) if you have an account. ![The New York Stock Exchange at Wall Street in New York City, U.S.](https://smartcdn.gprod.postmedia.digital/financialpost/wp-content/uploads/2025/01/no0117wallst.jpg?quality=90&strip=all&w=288&h=216&sig=Wyce26eQt1IwjJ5KY0W39A) The New York Stock Exchange at Wall Street in New York City, U.S. Photo by ANGELA WEISS/AFP via Getty Images files To say that U.S. stocks found a sweet spot the past few years would be an understatement. ![Financial Post](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/identity/logo-identity-fp.svg) Subscribe now to read the latest news in your city and across Canada. - Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others. - Daily content from Financial Times, the world's leading global business publication. - Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account. - National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on. - Daily puzzles, including the New York Times Crossword. Subscribe now to read the latest news in your city and across Canada. - Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others. - Daily content from Financial Times, the world's leading global business publication. - Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account. - National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on. - Daily puzzles, including the New York Times Crossword. Create an account or sign in to continue with your reading experience. - Access articles from across Canada with one account. - Share your thoughts and join the conversation in the comments. - Enjoy additional articles per month. - Get email updates from your favourite authors. Create an account or sign in to continue with your reading experience. - Access articles from across Canada with one account - Share your thoughts and join the conversation in the comments - Enjoy additional articles per month - Get email updates from your favourite authors ## Sign In or Create an Account or [Falling inflation](https://financialpost.com/tag/inflation/), [lower interest rates](https://financialpost.com/tag/interest-rates/), healthy corporate earnings and a strong economy sent stock markets on a two-year run that has defied even the most optimistic forecasts. The S\&P 500 gained 24 per cent in 2023 and 23 per cent in 2024, owing in large part to the strength of the so-called [“Magnificent Seven” stocks](https://financialpost.com/tag/magnificent-seven-stocks/) — Apple Inc., Microsoft Corp., Amazon.com, Inc., Alphabet Inc., Meta Platforms Inc., NVIDIA Corp. and Tesla Inc. — which accounted for 53 per cent of the S\&P’s returns last year and now make up more than one-third of the S\&P’s total market capitalization. But the unexpected rise, now-lofty valuations and an enthusiasm for [artificial intelligence](https://financialpost.com/tag/artificial-intelligence/) that is drawing parallels to the dot-com era have some questioning whether markets are in a bubble. ![FP Investor Banner](https://dcs-static.gprod.postmedia.digital/20.9.1/websites/images/newsletters/icon-fp-investor.svg) Canada's best source for investing news, analysis and insight. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Investor will soon be in your inbox. We encountered an issue signing you up. Please try again That the last time the S\&P 500 posted back-to-back 20 per cent gains was 1998 is only fuelling those concerns. [David Rosenberg](https://financialpost.com/tag/david-rosenberg/), founder and president of Rosenberg Research, is one who believes analysts are underestimating the “tremendous confidence in the future” driving the 2023-24 rally. Rosenberg says AI has hit an inflection point in the technology curve where investors typically lengthen their time horizons, as they did during the internet mania of the 1990s. Eventually, the dot-com bubble burst — but only after four years of incredible growth. “Even knowing about the mid to late 1990s, we don’t know where we are right now in this cycle,” Rosenberg said. “Is it ’96 or ’97, or is it ’98 or ’99?” Likewise, Bill Smead, founder and chief investment officer at Smead Capital Management, sees warning signs in the exuberance. In a Dec. 10 note to clients, Smead said investors were facing a “déjà vu moment” with bullish sentiment prevailing, record-high equity ownership by U.S. households and speculative investments such as Bitcoin hitting new highs. “Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears,” he said. Few dispute that AI will be transformative — it’s more a question of the market cycle, in which hype around new investments spirals into what former Federal Reserve Board chairman Alan Greenspan famously called “irrational exuberance” as investors drive stock prices far beyond what their fundamentals support, ending in a moderate correction or rapid freefall. “There’s usually a grain of truth that underlies every mania and bubble. It just gets taken too far,” Howard Marks, co-chairman of Oaktree Capital Management, wrote in a note to investors on Jan. 2. “It’s clear that the internet absolutely did change the world — in fact, we can’t imagine a world without it. But the vast majority of internet and e-commerce companies that soared in the late ’90s bubble ended up worthless.” But there are differences from the dot-com bubble, which was marked by “indiscriminate bidding” for companies with no viable business plans or path to profitability, such as pet supply website Pets.com or online grocery delivery startup WebVan, said Que Nguyen, a partner at Research Affiliates in Newport Beach, Calif. “It didn’t really matter what you said you were doing, as long as you had a dot-com next to it,” she said. > Many of the most respected investors of the last forty years are sounding alarms that are falling on deaf ears Even profitable companies that are still around today, such as Cisco Systems, Inc., got swept up in the hype as “the multiple kept ratcheting up faster than the earnings could catch up,” Nguyen said. Cisco’s stock price peaked at \$80 in March 2000 before declining 89 per cent by October 2002. Cisco’s fortunes have since rebounded, but its stock price has never fully returned to its dot-com-era high. Nguyen says a common parallel is chipmaker Nvidia, a poster child for the AI revolution. As of Jan. 16, Nvidia’s stock price has risen 833 per cent since the beginning of January 2023. Nvidia contributed more than 22 per cent to the S\&P 500’s overall return in 2024, more than any other stock. The difference with Nvidia, Nguyen says, is that investors are taking a wait-and-see approach to justify their expectations based on Nvidia’s revenue and earnings. “They’re not necessarily ratcheting up the multiples ahead of the earnings the way they were doing in the tech bubble, (which) tells me that it’s optimism but it’s not unbridled euphoria, which is what you get in a bubble,” she said. It also depends on your investing philosophy. Barry Schwartz, executive vice-president and chief investment officer at Baskin Wealth Management, says people who are calling it a bubble are likely dividend or value investors who don’t invest in tech stocks in the first place. “My argument is you’re not paying attention to what matters today. You don’t understand those business models,” he said. “You can’t say Google is expensive or Meta is expensive at 25 times earnings and compare it to your Canadian bank at 12 times earnings. There’s no mean reversion to these companies; they’re just growing and taking market share.” The unprecedented growth in big tech stocks means the U.S. now dominates global markets. U.S.-listed companies made up more than half of the world’s stock market value in 2024 and 70 per cent of the MSCI World Index, which tracks 1,500 mid and large-cap companies in 23 countries. Some call it “American exceptionalism,” the idea that the U.S. has a unique fusion of factors — including a buoyant economy, strong dollar, educational opportunities, infrastructure, the world’s largest consumer market and many of the world’s most profitable companies — that make it inherently powerful. “America is still a magnet for all sorts of people seeking freedom, people seeking economic opportunities, people seeking education opportunities, people seeking jobs, people seeking to start businesses, to innovate. I think that is something that is really unique about the United States,” said Nguyen. “There are other parts of the world that have that feature, but the United States is the largest country with that feature.” To others, the idea of American exceptionalism is simply attaching a narrative to price action — a “camouflage” for government deficit spending propping up growth, said Rosenberg. “If we are going to define exceptionalism as reckless fiscal policy, sure, let’s call it exceptionalism,” he said. “But that’s what makes America different, is that we are in the midst of an ongoing massive deficit-financed fiscal stimulus, whether it’s spending on one side of the income statement or tax subsidies on the other side of the income statement.” The idea that the U.S. is inherently positioned for perpetual superiority also doesn’t sit well with everyone in other parts of the world. In a Financial Times column, writer and economist Tej Parikh says America’s strengths mask some of its unflattering economic realities. “The fanfare over U.S. capitalism is not unfounded. But it can obscure arguments that counter the idea of U.S. economic superiority,” he wrote, citing high household spending on healthcare with worse health outcomes, high levels of credit card debt, economic growth supported by government spending and the “privileged ability” to run deficits and the fact that lower income earners are squeezed to afford necessities while high earners own the majority of equity investments. While the U.S. has scalability, liquidity and tech innovation on its side, Parikh argued in another column that there’s still opportunities for investors among European heavyweights such as LVMH Moet Hennessy Louis Vuitton SE, Nestlé S.A., Novo Nordisk A/S and ASML Holding NV. “They are established, broad businesses with global exposure, low volatility and strong earnings — and some are now undervalued,” Parikh wrote, adding that Europe also has several “competitive” companies across different industries such as Glencore plc, Siemens Energy AG, Airbus SE, Adidas AG, Carl Zeiss Meditec AG and SAP SE. “The stellar returns of the U.S. stock market do not mean that European companies are no good,” Parikh wrote. “Rather, investors are willing to pay a premium to get exposure to AI (and Trump 2.0) — one that is looking harder to justify.” In 2025, Wall Street analysts are forecasting the S\&P 500 to gain anywhere from 5 per cent to 20 per cent, with most analysts predicting between 10 per cent and 15 per cent — but they are keeping an eye on how an “unusually concentrated” market will affect returns over the long term, Goldman Sachs chief U.S. equity strategist David Kostin said in a November Goldman Sachs Research newsletter. “Investors should be concerned about market concentration over the longer term, say 10 years, because the historical record suggests that a meaningful relationship exists between market concentration and forward returns, with high concentration associated with lower returns over longer horizons,” he said. As the Magnificent Seven stocks continue their run in 2025, analysts are also keeping an eye on whether companies’ earnings can deliver on investors’ high expectations and sustain growth if strong performance is already priced in. “It shouldn’t come as a surprise that the return on an investment is significantly a function of the price paid for it,” Marks wrote in his note. “For that reason, investors clearly shouldn’t be indifferent to today’s market valuation.” Yields on 10-year Treasury bonds are also creeping up to 5 per cent, posing risk-free competition to the expensive equity market and making investors anxious that higher borrowing costs will dampen corporate profits. But after two years of growth beyond wildest expectations, Rosenberg says beauty is in the eye of the beholder when it comes to the animal spirits driving the market rally. “There’s people that believe that AI is going to produce 30 per cent of its growth over the next five years,” he said. “So, when I tell some people, ‘Well, 20 per cent is priced in,’ they say, ‘Oh my God, the market’s cheap then.’” ***Bookmark our website and support our journalism:** Don’t miss the business news you need to know — add [financialpost.com](https://financialpost.com/) to your bookmarks and sign up for our newsletters [here](https://financialpost.com/newsletters/).* Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about [cookies here](https://financialpost.com/cookie-policy/). 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