Bear Market – (phrase) a financial market or mood in the financial market that is characterized by pessimism and prices spiraling downwards.
Bull Market – (phrase) a financial market or mood in the financial market that is characterized by optimism, consumer confidence, and expectations of strong results will continue.
A bear market and a bull market are important symbols and concepts used in English to describe the financial situation of the market. You may have been to New York City and seen the Charging Bull statue on Wall Street and wondered why this statue was placed there. While it is unclear where the origin of the phrase “bear” and “bull” came from, and why those two animals were chosen, there are two possible origins according to investopedia.com:
- Bears tend to attack their opponents by swiping their claws downward at an opponent while bulls tend to thrust its horns upwards in the air. Hence, downward and upward motions like the upwards and downward motions of stocks.
- Additionally, because bearskins were quite popular in the past as well as hard to obtain, bearskin salesmen would try to sell skins they haven’t received yet. This led to lots of speculation about the future price for these skins. The bearskin trappers (people who killed the bears and brought the skins to the salesmen) would profit from the difference between the cost to make the skins and the selling price. The salesmen became known as “bears”, short for “bearskin jobbers” and the term continued to be used to describe a downward market. Additionally, Bears and bulls were seen as opposites and enemies do to the popularity of the bloody bear and bull fighting games (you can guess how the games were played), “bull” began to be used to describe the opposite of bears.
As mentioned at the top of the article, bull and bear are important ideas to know when using English, particularly if you are interested in studying finance. We may use it most often as a noun. For example, this is an article from City Wire, a British investing website about JP Morgan global market strategist Mike Bell predictors for a bear market:
We can also see another use of bear market below, from an article in Bloomberg News on the unlikely possibility that Australia will change its interest rate:
At the same time, Australia’s biggest export, iron ore, has fallen into a bear market, potentially undermining any boost to government revenues from an unexpected rally in prices last year.
Notice that Australian iron ore has “fallen into” a bear market, highlighting that the movement of the price is going downwards as people develop a pessimistic view of the iron ore market.
The following terms below are also related to bear and bull markets.
bearish – (adj) a positive outlook on activities in the future
bullish – (adj) a negative outlook on activities in the future
bull market rally (phrasal noun) a period of increase price of stocks, that follows a period of flat or declining prices. This leads to a general belief that the market will continue to get stronger, hence giving a more positive outlook to an already positive situation.
bear market rally – (phrasal noun) a period in which prices of stocks increase for a short period. It often comes after a period of decline and also comes before another downward trend in the market.