Economy The slippage in the US stock market raised fears about the bear market – What does stock market slang mean?

Shares the downturn on Wall Street in the U.S. deepened for a moment on Friday to what the investor slang calls a bear market.

The stock index S&P 500 fell 2.3 percent and at the same time it fell more than 20 percent from its previous peak. This was the first time since the start of the corona pandemic that the index had fallen from its previous peak just as sharply, writes Financial Times.

By definition, the situation in the stock market turns into a bear market when an important index falls more than 20 percent from its previous peak.

The US stock market has been declining for weeks. The weakened market sentiment is the result of an interest rate hike announced by the central bank Fed. The European Central Bank has also announced that it will start tightening monetary policy by accelerating the downsizing of its securities purchase program.

In addition, accelerating inflation, Russia’s invasion of Ukraine, China’s drastic corona measures and the consequent increasing disruptions in global production chains are bringing clouds to the sky.

S-Bank chief analyst Lippo Suominen According to him, the fact that the S&P 500 index reaches the level of the bear market means in practice nothing more than that investors are now worried.

“Investor circles like such symbolic levels. It doesn’t really matter, but of course the market has been down quite a bit since the beginning of the year. ”

According to Suominen, the companies’ latest earnings season went well, and other financial figures have also been at a reasonably good level.

“We have no facts that the point is going badly. Investors are still nervous about the future and the possibility of a recession. ”

For next week, Suominen promises to continue the general nervousness.

“Over the last couple of weeks, we’ve seen brisk upturns as well. At times, investor optimism awakens, then buys and then follows another disappointment. Personally, I see that the risks are still down. ”

Let’s get back yet for stock market animal comparisons. Why do investors use them so much? In addition to the bear market, there is talk of a bull market, which means a strong and long-lasting rise in stock prices.

According to Lippo Suominen, the bear and bull market is the most used animal term in the investor slang.

“Yes, the gang is constantly inventing more and more new concepts, but I don’t remember having any other well-established animal terms.”

American The Merriam-Webster dictionary saysthat the term “bear” was used on the stock exchange before “bull”.

According to etymologists, the term originates from an old proverb that it is not wise to “sell a bear’s skin before the bear is caught”. As early as the 18th century, “bearskin” referred to people who sold bearskins. Soon the bearskin was shortened to a mere bear and the term began to be used for shares sold by speculators.

In the 18th century, another animal symbol also appeared in the professional slang of investors. The term “bull” was originally intended to be a speculative purchase whose price was expected to rise.

The bull may have been chosen to symbolize vitality, as opposed to a sleeping bear.