The rapid decline we saw in U.S. markets over the last two weeks left a lot of investors wondering if we have bottomed yet. With the Nasdaq and the S&P 500 both down almost 9% during the last month, the damage has been widespread and is no longer limited to just SaaS or technology stocks. There have been a lot of comparisons to other bear markets to determine if there are factors signaling a bottom. While history rhymes, it does not repeat, and the backdrops of other bear markets were different.
The Fed was not rapidly raising interest rates (the last 75 basis point hike was in 1994) to counter runaway inflation during three of the last four bear markets. Nor do I recollect surging oil prices driven by global uncertainty. We are coming off a long period of record corporate margins driven by low interest rates and a favorable labor market as you can see from the chart below.