Market History: Here's What Happens to Earnings When The Economy Slows

How many expert stock pickers of the FAANG and smid-cap cloud cyclical peak know what happened to what used to be called the cloud (the internet) stocks as The Economic Cycle peaked at +5.3% year-over-year GDP growth in Q2 of 2000?

Here’s a quick historical rewind on both peak GDP vs. “it’s different this time” Tech profits back then:

A) Year-over-year US GDP Growth:

1. Q2 of 2000 = +5.3%
2. Q3 of 2000 = +4.1%
3. Q4 of 2000 = +3.0%
4. Q1 of 2001 = +2.3%
5. Q2 of 2001 = +1.1%

*note, from #PeakCycle in Q2 2000, every quarter GDP slowed

B) Year-over-year SP500 Tech Earnings Growth:

1. Q2 of 2000 = +44%
2. Q3 of 2000 = +40%
3. Q4 of 2000 = +9%
4. Q1 of 2001 = -32%
5. Q2 of 2001 = -56%

*note, from #PeakCycle what EPS growth did as GDP slowed