Greenberg: Comparing Today’s Market to 1999

This market feels so much like 1999. But feeling and facts are two very different things.

And the facts don’t bear out the feeling, which is why whenever anybody asks me whether the market is going up or down I say, "yes."

Smart people, often with great passion, give me technical and fundamental reasons supporting both. It depends on how you want to slice the data, which is what makes markets.

Comparing 1999 to today:

  • Oil, then: Around $16 a barrel. Today: $104.
  • 30-Year Treasury, then: 5.6 percent. Today: 4.49 percent.
  • Three-Month T-Bill, then: 4.4 percent. Today: 0.084 percent
  • Libor, then: 5.5 percent. Today: 1.92 percent.
  • Overnight Fed Funds rate, then: 4.97 percent. Today (February): 0.16 percent.
  • Inflation (CPI), then: 1.73 percent. Today: 2.1 percent.
  • Dow Jones Industrial Average: 10,000, on its way to around 12,220 in March 2000. (It actually got a bit higher a month earlier.) Now: 12,220.
  • The Nasdaq: 2,492 — on its way to 5,000 in March 2000. Today: 2,744 (about where it was in March 1999).

Here’s where it gets interesting: The S&P 500 Price/Earnings Ratio, then: 31.44. Today: 17.35.

My take: Interest rates and the P/E ratios make a good case for stocks. Inflation, the Dow and its potential impact on interest rates don’t — especially after quantitative easing disappears. Good luck trying to figure this one out. The beat goes on.

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Follow Herb on Twitter: @herbgreenberg


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