#167 How This Ends (Fred Wilson & More)

July 18, 2024

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Picture of the Day: Nasdaq up 22%, S&P up 18% YTD (as of 7/17/24)

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How This Ends (Fred Wilson & More) - Part Four?

One year ago, Fred Wilson released How This Ends (Part Three) where he shared the following: “The venture capital sector has been in a sustained downturn for almost eighteen months. How does this downturn end? Well, it may have already ended, but let’s see about that. We will know for sure in a few quarters. The NASDAQ peaked at roughly 16,000 in November 2021. By June 2022, it was down 33%. It stayed down for all of 2022 and ended the year at roughly 10,500. But this year the NASDAQ is up almost 40%.”

That was then. Today the NASDAQ is just under 18,000, or up almost another 30% (22% up this year alone).

What’s driving this? Inflation and interest rates continue to be big parts of the puzzle and there’s good news - both seem to be coming down. On inflation: “Inflation falls 0.1% in June from prior month, helping case for lower rates." On interest rates: “Powell indicates Fed won’t wait until inflation is down to 2% before cutting rates.”

So how does this all end and what does this mean for venture capital? Since we’re still waiting on Fred’s latest 2024 take on this via Paragraph (go subscribe!), we’re going to take a shot at unpacking this here.

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