The Compound and Friends Stocks Fueling Consumers, AI Bull Market Tracks the Late 90’s With Nick and Jessica, Mohamed El-Erian Tells Powell to Resign
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Jul 22, 2025 
Nick Colas and Jessica Rabe, co-founders of DataTrek Research with expertise in market analysis, discuss the current earnings landscape of the S&P 500, revealing strong performances despite a cautious 'sell the news' mindset. They draw intriguing parallels between today’s AI-driven rally and the late 90s Dot Com boom. The duo also delves into the implications of Fed Chair Powell possibly resigning and the economic resilience of American consumers, highlighting diverse spending behaviors across income brackets.
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Valuations Demand High Confidence
- The current high S&P 500 valuation requires aggressive confidence that earnings and multiples will hold or rise.
- Valuation risks are significant unless investors accept rare recession probability and robust economic resilience.
Global Flows Favor US Tech
- European investors increasingly allocate capital to US markets due to lack of local innovation and growth companies.
- This foreign capital influx may sustain US equity multiples without a historical upper limit.
AI Rally Mirrors 1990s Internet Boom
- The current AI-driven tech rally mirrors the late 1990s internet boom in Nasdaq performance and market conditions.
- Bull markets face volatility but secular growth lasts years until widespread technology adoption consolidates.