"Burry noted the resemblance between today's price action and the waning days of the dot.com craze-adding that it's feeling like "the last months of the 1999-2000 bubble." Fellow famed veteran Paul Tudor Jones, in a CNBC interview on May 8, partially echoed Burry's warning. Jones stated that the current scenario reminds him of 1999, the first year of the infamous furor, noting that if the current momentum keeps rolling, we could be facing "breathtaking kinds of corrections.""
"Wall Street's analysts and market strategists are at pains to explain what Burry and Jones can't, namely, why U.S. big caps keep jumping to fresh, all-time records. The economic fundamentals overall look mediocre at best. The current scenario headlines inflation that's proving both high and extremely sticky, as underlined once again in the April CPI report on May 12 that showed consumer prices advancing a hot 3.7% in the prior 12 months. GDP growth's ho-hum, the 10-year Treasury yield's stuck in the elevated mid-4% range, and ultra-tall energy prices keep digging into consumers' wallets, hiked by a war that keeps dragging on."
"In their notes to investors and TV appearances, the bulls increasingly cite the same justification: A surge in corporate earnings that's supposed to prove unstoppable due to the super-power of AI. "Absolutely non-stop AI," Burry fretted after listening to prognosticators in the media endlessly tout the breakthrough as a miraculous cure-all for the sundry negatives. "No one is talking about anything else all day.""
"But investors should beware: Torrid earnings-per-share-and they've never been this overcooked befor"
NASDAQ 100 strength is being framed as a potential late-stage bubble, with comparisons to the dot-com period and expectations of a complete reversal. Warnings cite weak economic fundamentals, including sticky inflation, modest GDP growth, elevated long-term Treasury yields, and high energy prices that pressure consumers. Hopes for large rate cuts are described as fading. Market bulls attribute continued gains to corporate earnings powered by AI, with AI described as the dominant narrative. Concerns are raised that earnings growth is overheated and that investors may be underestimating the risk of sharp, breathtaking corrections.
Read at Fortune
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