Is 2026 the New 1929? Graham Stephan on 5 Warning Signs of a Stock Market Crash
Finance influencer Graham Stephan wasn’t mincing many words in a recent YouTube video shared with his audience: The current stock market “makes no logical sense whatsoever,” with Stephan pointing to the ongoing U.S.-Iran conflict, soaring gas prices and unrelenting broader inflationary pressure seemingly at odds with record-high valuation of the S&P 500.
The potential end result, Stephan said while comparing a chart of the S&P 500 (1997 to 2026) versus the Dow Jones Industrial Average from 1920 through 1930, is what he termed the “great melt-up” before everything falls apart.
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On the question of whether the United States was currently sitting on the cusp of another market bubble, the YouTuber and finance guru spoke on three different stock market crash concepts.
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“Yes, stocks are still expensive when compared throughout history, [but] these companies, we have to admit, are making a lot of money. More so than ever existed during the dot-com bubble,” Graham said, adding that even though the top 10 companies in the S&P 500 make up nearly 40% of the entire index, smaller enterprises were playing catch-up quite well. In that event, volatility would hypothetically be reduced.
Secondly, Stephan indicated — via the usage of an “S&P 500 Bull Markets Since 1932” chart — that the 2020 bull market was actually quite unexceptional by comparison and that the so-called Magnificent Seven (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) were “genuinely impressive companies” that doing very well and boosting overall investor confidence in the market. Earnings were also, in his view, strong enough to warrant believing a crash may not be imminent.
5 Warning Signs of a Stock Market Crash
On the naysayers side, however, Stephan cited Fidelity on the following five warning signs that potential investors should watch out for.
“One, companies burning through cash while spending more than they make. Two, businesses each owning a piece of each other to the point where if one falls, they all fall,” he explained.
“Three, debt levels are growing out of proportion to profits. Four, AI hitting a limit in terms of how much energy it uses, which would literally cap growth. And five, if borrowing costs increase, [company] profits will decrease,” he added.
Punctuating these rather ominous warning signs with a reminder that Fidelity was actually bullish on the market continuing an upswing in the near term — with AI being adopted by smaller businesses continuing the growth push, including among professional services companies, healthcare operations, utilities and industrials enterprises — Stephan called for viewers to stay calm (and stay the course).
He did admit that the current CAPE (cyclically adjusted cost-to-earnings) ratio was high and that one of the other warning signs — every major company involved being invested in every other major company in a circular pattern — were in evidence, but remained positive. Stephan even went so far as to suggest that with all of the market bubble talk having been almost played out, the market might already be “priced-in” with this risk of downturn being widely accepted.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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