Episode summary
Dylan Jovine | Are We Entering a Bear Market?
Summary
Dylan Jovine centers the episode on a Deutsche Bank report, “Lessons from 250 Years of Disruption,” to push back on the idea that AI will destroy the labor market. He argues that when the data is viewed from 1795 onward in the U.S. and U.K., the historical pattern is clear: major unemployment spikes have usually come from recessions and macro shocks, not from new technologies. His conclusion is that if AI truly caused broad job destruction, it would be the first innovation in history to do so.
He uses Henry Ford’s assembly line as the clearest example of how automation can initially displace work but ultimately expand demand and employment. In his telling, cheaper cars created a surge in consumption that supported jobs not only in auto manufacturing but also in related industries like tourism and homebuilding. The broader lesson, he says, is adaptation rather than permanent labor collapse.
Jovine then shifts to the market, where he says tech is showing unusual internal cracks. Software stocks have been hit especially hard, and the Magnificent Seven have underperformed the S&P 500 so far in 2026. He sees a sizable rotation underway and warns that if valuations stay elevated, the market could be entering a bear phase that takes time to fully unfold.
Key takeaways
- Dylan Jovine says Deutsche Bank’s historical data suggests recessions, not new technology, have driven most major unemployment spikes since 1755.
- He argues AI would be the first major innovation in history to destroy the labor market in aggregate, if that scenario plays out.
- Jovine uses Ford’s Model T assembly line to argue automation can lower costs, lift demand, and ultimately create more jobs than it removes.
- He says U.S. software and services has fallen from the third most expensive industry group in January to 10th, showing severe pressure inside tech.
- Jovine notes the Magnificent Seven have underperformed the S&P 500 so far in 2026 and sees a major rotation underway.
- He warns the market could resemble 2000, when the damage from the tech bubble took months to fully show up.
Notable quotes
“if AI were to destroy the labor market in aggregate, it would be the first major innovation in history to do so”
“unemployment driven by macro factors like recessions, not new technologies”
“Mass production dramatically reduced the cost of the car, unleashing a surge in demand and ultimately creating a lot more jobs”
“For two decades, tech and software have gone hand in hand. But we now have for the very first time ever in the history of tech basically winners and losers within tech and software”
“all MAG7 has underperformed the S&P so far in 2026”
How the episode opens
Good morning. This is Dylan Joan with Behind the Markets. Happy Thursday.
Today is Thursday, March 12th. What a great day it is to be alive and here with you today. Today I'd like to talk about this great little report that came out of Deutsche Bank.
I mentioned them a couple times this week. They're on a roll. Anyway, the headline is lessons from 250 years of disruption.
And I'm a bit of a nerd. I like to go back and look at historical context with financial markets and human natures. And they really asked a question.
People are saying AI is going to destroy the labor market. If AI is going to destroy the labor market, how's it going to work? And they went back and they looked at markets since 1795, both UK and America basically, and UK is more developed at that point for sure.
They come out with a few takeaways here. Lots of nice charts, bullet points, and takeaways. And I'm going to go through some of them with you.
Number one, if AI were to destroy the labor market in aggregate, it would be the first major innovation in history to do so. Number two, since 1755, the start of the first industrial revolution, humans have been extraordinarily innovative with unemployment driven by macro factors like recessions, not new technologies. So they're saying basically unemployment is driven by recessions, not new technologies.
They're saying this time would have to be very different if AI as the new technology caused it. It basically would be the first time in history that a new technology caused joblessness like that. The most likely scenario they say number three all through history technology has shifted.
AI will shift jobs around again, but the most likely scenario is not huge job losses, but adaptation and future jobs we didn't know existed or were needed.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai and labor market
- historical tech disruption
- bear market fears
- software stock weakness
- tech sector rotation
Companies and tickers mentioned
- DB
- Deutsche Bank
Watch the episode
Watch “Dylan Jovine | Are We Entering a Bear Market?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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