The World Market Hits Bear Territory As Stocks Fail To Go Up

Global February 12, 2019

It seems just like yesterday when Wall Street, together with United States President Donald Trump, have been gushing over the longest bull market in the history of the country. That basically meant that the S&P 500 didn’t have any downfall for over 40 percent in years. It turns out that it was all too good to be true because the opposite is upon them with bear market approach.

Some analysts say that it is still a little too early to predict that, but with the continuous downfall of some of the biggest companies in the country, it may be a little too obvious. However, it is not just about the US market anymore, because some other nations are seeing the decline as they happen.

Nation Stocks Continues To Go Down

Some of the world’s biggest stock indices can see the bear market approach. That is because of the massive 20 percent loss they had. Cities of Frankfurt, Milan, Tokyo, and Shanghai have been witnessing all of these weak performances they’ve been experiencing and it can also be seen across the globe. Some experts said that most of the stocks and bonds have definitely gone down this year, and it would seem that it continues to go down without a break.

One of the predicted reasons was the interest rates rising as well as some political matters such as the trade wars between the United States and China, as well as the Brexit deal. Chinese President Xi Jinping may have agreed on to a truce with President Trump, but it doesn’t mean that it is officially over. Experts have witnessed how Chinese markets have suffered so much this year with most of the biggest companies losing more than 30 to 50 percent. The issue with the Huawei executive arrest didn’t make things better either. The Brexit deal, on the other hand, will most likely affect most nations in the EU.

Analyst has also been seeing the signs of weaker economic growth worldwide, which is definitely not a good sign. The chief economist of the Capital Economics, Neil Shearing, said that this coming year will definitely be even more challenging for the global market, especially with the equity struggling and some stocks may experience some of their steepest declines that are usually inevitable.

Signs The Bear Market Is Approaching

Not a lot of people still understand what exactly would it mean for them once the bear market comes. The last bear market was between the years of 2007 and 2009, and it was considered to be the biggest decline the world has seen since 1945, that is because this one lasted for 17 months and the previous one only lasted 14 months which was after the World War II.

However, the longest one actually lasted for 61 months, but it wasn’t considered as worse. The bear market basically means that the securities prices fall by 20 percent or more by not just one but multiple companies, which typically includes the overall market index of the S&P 500.

Analysts have officially declared that the US market has hit the bear market territory the day before Christmas this year, so it wasn’t exactly a nice holiday for some stockholders. This may last for months and of course years, and if it does last for years then it may be considered a financial crisis once more. The economy of the United States was steadily good the past few years, until this year where the decline can no longer be covered.

Some of the biggest signs that the economy has hit the bear market territory is when the employment rates start to fall, the income starts to go down as well because of the weak productivity as well as the drop of some business profits. Some places may have to go out of business if this last for years.

Another sign would how to be how the tech stocks seem to underperform more than the usual. The biggest stocks in the industry have got to come from the tech market because of how it has literally been taking over the world. Apple, for instance, had to endure stocks falling in the past few months despite their new line of iPhones being released, Huawei, on the other hand, had to face some executive controversy which led to their stocks going downhill.