Portfolio manager flags all five pre-2000 crash indicators amid a 7% weekly drop in the Nasdaq 100 and record outflows.
The Nasdaq 100 has mirrored all five warning signs that preceded the 2000 dot-com crash, including a 7% weekly decline and a record $12.7 billion exodus from Invesco QQQ Trust in Q1. Portfolio manager Jonathan Wellum highlighted explosive CapEx, sky-high valuations, market concentration, speculative fever, and earnings uncertainty as key parallels to the pre-crash era.
The S&P 500 has also slipped, with SPY down about 4% over the past week, while the Nasdaq Composite has struggled despite a 30% gain over the past year. Wellum’s analysis points to a potential rotation into defensive sectors like energy and staples, which led the recovery after the 2000 crash. XOM, trading at a forward P/E of 13 with a beta of 0.15, and JNJ, up 56% in the past year, are among his targets.
The shift comes as Wall Street’s AI-driven rally shows signs of strain, with the Nasdaq 100 wobbling after a prolonged bull run. Wellum’s framework suggests the current market may face deeper corrections if earnings delivery fails to meet expectations.