Sunday, June 23, 2024

‘When Will The Current Bear Market End? Some Tentative Predictions.

( Major stock indexes across the world plummeted in the first few months of 2020 because of the COVID-19 outbreak, bringing to an end the longest bull market run in US history. We’re now well and truly in bear market territory and likely to remain there for many months to come. 

For many investors, the current crisis came out of the blue. One moment, they were riding high on stock market gains; the next, the economy was shut down. Very few people had ever considered the ramifications of a global pandemic on daily life. The world survived swine flu, SARS, and bird flu just fine. Why would this be any different? 

Soon, though, the reality set in and investors tried to dump as many shares as they could, seeing that the economy was going to tank. That led to a glut on the market. Lots of sellers and relatively few buyers meant that prices inevitably had to fall.

Now the question on investors’ lips is when the bear market will end. With lockdowns in force across the developed world for months to come, not many people can see the light at the end of the tunnel. And when we are finally released, like battery-farmed cows into a big open field, will there still be an economy left? 

The Bear Market Will End In The US Sooner Than Other Parts Of The World

The first prediction of this article is that the bear market will end in the US faster than other parts of the world. 

There are a couple of reasons for this. First, the epidemic curve is following a very steep incline in this country. This shape means that there will be more deaths and suffering here, but the epidemic will be over faster. People will return to work more quickly than they will in other parts of the world. 

Second, people are pouring money into US dollars right now through their forex broker. America is a haven and home to half the world’s intellectual capital. Companies on our exchanges will eventually benefit from this shift in investor focus as the economy comes back online. 

Finally, the US economy was in strong shape before the crisis hit. A lot of people were in work, productivity was rising, and new technologies were making us all a lot wealthier. All that capital still exsts, and we can put it to use in the future. 

The Bull Run Will Return Faster Than You Think

Right now, it seems like there’s no end in sight. But the bull run will likely return faster than you think. Remember, this current economic crisis isn’t the same as the financial crisis of 2008. Back then, the problem was debt. Banks didn’t have any liquidity and credit markets froze overnight. This time around, debt isn’t so much of a problem, and central banks say that they will backstop the financial system. In other words, the credit will continue to flow. Expect a significant rebound in the second half of the year as consumers splurge due to pent-up demand. 

Staff Writer; Craig Hall

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